Immigration, Parenthood and Child Penalties (Job Market Paper)

María Alexandra Castellanos
This paper analyses the impact of an immigration-induced expansion of household services on parenthood costs. In a unique quasi-experimental setting, I exploit the sudden supply shock in domestic and childcare services during the Spanish migration boom. I examine whether the availability of affordable substitutes for household production can reduce gender disparities associated with labour market parenthood penalties. Using a novel individual-level measure of the child penalty and a rich matched employer-employee administrative dataset, I combine a difference-in-differences strategy with a shift-share instrumental-variable design to estimate the causal effect of the shock. I find that the expansion of domestic services driven by a large inflow of female immigrant workers reduced the gender gap associated with child penalties for native workers. The responses are driven by two main channels: labour supply and job quality for native mothers. This includes employment in higher-paying firms, as well as better sectoral and occupational attributes. The effect is persistent over time and more pronounced for low-skilled native women, suggesting that affordable substitutes for household production can not only help alleviate gender gaps but also reduce within-gender inequality.

Quasi-Random Matches: Evidence from Dual Labour Markets

María Alexandra Castellanos, Henry Redondo, Jan Stuhler
A fast-growing literature studies how sorting into particular jobs, firms, or locations affects workers. The key challenge when studying such questions is the non-random sorting of workers into jobs. We propose a novel identification strategy that exploits the timing of worker-firm matching. We isolate quasi-random variation in matches by interacting high-frequency information on the duration of contracts on the labour supply and transitory fluctuations in job creation on the labour demand side. We apply this method to address a central question in dual labour markets: how do different contract types – fixed-term or open-ended contracts – affect workers’ careers? We find that transitory variation in the opening of permanent contracts is highly predictive of individual promotion probabilities and has long-lasting effects on earnings, employment, and the accumulation of experience in permanent positions.

Immigration and native labour market outcomes. New Evidence from Spain

María Alexandra Castellanos
Understanding the effect of immigration in native labor market outcomes represents one of the most debated questions in the economic literature, after decades of research, no consensus has been reached. In the context of the Spanish immigration boom of the 2000’s, this paper evaluates to what extent different methodologies applied in the migration literature can explain apparent conflicting results. To identify causal estimates, the study applies a pure spatial correlation approach combined with an instrumental variable strategy exploiting information on early immigrant settlements from the two previous decades at a detailed local labour market level. Using large-scale administrative social security records in an event-study design framework, I find that immigration led to large negative local employment responses for low-skilled workers, but only mild wage effects. Analysing margins of adjustment, I show that the strong impact on displacement is not necessarily attributable to job-losses, but mainly driven by a reduction of native inflows into work in more exposed regions.
Draft coming soon!

Work in Progress