Economic preferences across generations and family clusters

A new GLO Discussion Paper using data from Bangladesh finds that both mothers’ and fathers’ risk, time and social preferences are significantly (and largely to the same degree) positively correlated with their children’s economic preferences. Families cluster in those with either relatively patient, risk-tolerant and pro-social members or in families with relatively impatient, risk averse and spiteful members.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 592, 2020

Economic preferences across generations and family clusters: A large-scale experimentDownload PDF
by
Chowdhury, Shyamal & Sutter, Matthias & Zimmermann, Klaus F.

GLO Fellows Shyamal Chowdhury, Matthias Sutter & Klaus F. Zimmermann

Author Abstract: Economic preferences are important for lifetime outcomes such as educational achievements, health status, or labor market success. We present a holistic view of how economic preferences are related within families. In an experiment with 544 families (and 1,999 individuals) from rural Bangladesh we find a large degree of intergenerational persistence of economic preferences. Both mothers’ and fathers’ risk, time and social preferences are significantly (and largely to the same degree) positively correlated with their children’s economic preferences, even when controlling for personality traits and socio-economic background data. We discuss possible transmission channels for these relationships within families and find indications that there is more than pure genetics at work. Moving beyond an individual level analysis, we are the first to classify a whole family into one of two clusters, with either relatively patient, risk-tolerant and pro-social members or relatively impatient, risk averse and spiteful members. Socio-economic background variables correlate with the cluster to which a family belongs to.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Linguistic Traits and Human Capital Formation. GLO Discussion Paper of the Month June.

The GLO Discussion Paper of the Month of June finds that existing cross-language variations among migrants from the same countries of origin affected human capital accumulation of second generation migrants in the US.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS, EconPapers)Complete list of all GLO DPs downloadable for free.

GLO Discussion Paper of the Month: June

GLO Discussion Paper No. 570, 2020

Linguistic Traits and Human Capital FormationDownload PDF
by
Galor, Oded & Özak, Ömer & Sarid, Assaf

GLO Fellows Oded Galor & Ömer Özak

Author Abstract: This research establishes empirically that existing cross-language variations in the structure of the future tense and the presence of grammatical gender affected human capital accumulation. Exploiting variations in the dominant languages among migrants from the same countries of origin, the study explores the impact of these traits on the educational attainment of second generation migrants in the US. The results suggest that college attendance among individuals with identical ancestry is (i) higher if the dominating language at home has a periphrastic future tense, and (ii) lower for women exposed predominantly to sex-based grammatical gender.

GLO Discussion Papers of June 2020

585 The Short-Term Effect of COVID-19 on Self-Employed Workers in Canada – Download PDF
by 
Beland, Louis-Philippe & Fakorede, Oluwatobi & Mikola, Derek

584 A tale of three countries: How did Covid-19 lockdown impact happiness? – Download PDF
by 
Greyling, Talita & Rossouw, Stephanie & Adhikari, Tamanna

583 The Impact of Forced Displacement on Host Communities. A Review of the Empirical Literature in Economics – Download PDF
by 
Verme, Paolo & Schuettler, Kirsten

582 Genetic Risks, Adolescent Health and Schooling Attainment – Download PDF
by 
Amin, Vikesh & Behrman, Jere R. & Fletcher, Jason M. & Flores, Carlos A. & Flores-Lagunes, Alfonso & Kohler, Hans-Peter

581 The first victims of Covid-19 in developing countries? The most vulnerable workers to the lockdown of the Tunisian economy – Download PDF
by 
Marouani, Mohamed Ali & Minh, Phuong Le

580 Are Older Workers Willing to Learn? – Download PDF
by 
Ruhose, Jens & Thomsen, Stephan L. & Weilage, Insa

579 How do new immigration flows affect existing immigrants? Evidence from the refugee crisis in Germany – Download PDF
by 
Deole, Sumit & Huang, Yue

578 Trapped in inactivity? The Austrian social assistance reform in 2019 and its impact on labour supply – Download PDF
by 
Christl, Michael & De Poli, Silvia

577 Labor Market Policies in a Roy-Rosen Bargaining Economy – Download PDF
by 
Jales, Hugo & Yu, Zhengfei

576 How does Fintech Innovation Matter for Bank Fragility in SSA? – Download PDF
by 
Nguena, Christian-Lambert

575 What accounts for the rising share of women in the top 1%? – Download PDF
by 
Burkhauser, Richard V. & Hérault, Nicolas & Jenkins, Stephen P. & Wilkins, Roger

574 Econometric Models of Fertility – Download PDF
by 
Miranda, Alfonso & Trivedi, Pravin K.

573 Markov switching models for happiness during a pandemic: The New-Zealand experience – Download PDF
by 
Rossouw, Stephanie & Greyling, Talita & Adhikari, Tamanna & Morrison, Phillip S.

572 Decomposing poverty in hard times: Greece 2007-2016 – Download PDF
by 
Andriopoulou, Eirini & Kanavitsa, Eleni & Tsakloglou, Panos

571 Covid-19, Family Stress and Domestic Violence: Remote Work, Isolation and Bargaining Power – Download PDF
by 
Beland, Louis-Philippe & Brodeur, Abel & Haddad, Joanne & Mikola, Derek

570 Linguistic Traits and Human Capital Formation – Download PDF
by 
Galor, Oded & Özak, Ömer & Sarid, Assaf

569 Testing for Asymmetric Employer Learning and Statistical Discrimination – Download PDF
by 
Ge, Suqin & Moro, Andrea &  Zhu, Beibei

568 The Important Role of Equivalence Scales: Household Size, Composition, and Poverty Dynamics in the Russian Federation – Download PDF
by 
Abanokova, Kseniya & Dang, Hai-Anh H. & Lokshin, Michael M.

567 The COVID-19 pandemic and its impact on inequality of opportunity in psychological distress in the UK – Download PDF
by & 
Davillas, Apostolos & Jones, Andrew M.

GLO DP Team
Senior Editors: Matloob Piracha (University of Kent) & GLO; Klaus F. Zimmermann (UNU-MERIT, Maastricht University and Bonn University).
Managing Editor: Magdalena Ulceluse, University of GroningenDP@glabor.org  

DP of the Month June

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Effects of Peers and Rank on Cognition, Preferences, and Personality in India

A new GLO Discussion Paper using data from India reveals that enrolling in a selective college affects cognition, preferences and personality

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 591, 2020

Effects of Peers and Rank on Cognition, Preferences, and PersonalityDownload PDF
by
Dasgupta, Utteeyo & Mani, Subha & Sharma, Smriti & Singhal, Saurabh

GLO Fellows Subha Mani & Utteeyo Dasgupta

Author Abstract: We exploit the variation in admission cutoffs across colleges at a leading Indian university to estimate the causal effects of enrolling in a selective college on cognitive attainment, economic preferences, and Big Five personality traits. Using a regression discontinuity design, we find that enrolling in a selective college improves university exam scores of the marginally admitted females, and makes them less overconfident and less risk averse, while males in selective colleges experience a decline in extraversion and conscientiousness. We find differences in peer quality and rank concerns to be driving our findings.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Work norms among immigrants and disability take-up when times are tough

A new GLO Discussion Paper examines how work norms affect Social Security Disability Insurance (SSDI) take-up rates in response to worsening economic conditions focusing on immigrants in the US and their work norms determined in the home country. Receiving SSDI is more sensitive to economic downturns among immigrants from countries where people place less importance on work.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 590, 2020

Who Goes on Disability when Times are Tough? The Role of Work Norms among ImmigrantsDownload PDF
by
Furtado, Delia & Papps, Kerry L. & Theodoropoulos, Nikolaos

GLO Fellow Nikolaos Theodoropoulos

Author Abstract: We examine how work norms affect Social Security Disability Insurance (SSDI) take-up rates in response to worsening economic conditions. By focusing on immigrants in the US, we can consider the influence of work norms in a person’s home country, which we argue are exogenous to labor market prospects in the US. We find that the probability of receiving SSDI is more sensitive to economic downturns among immigrants from countries where people place less importance on work. We also provide evidence that this result is not driven by differential sensitivities to the business cycle or differences in SSDI eligibility.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Alfredo Toro Hardy: “China versus the US. Who will prevail?” A new book explains why the rising confrontation between China and the US has become structural and not simply conjectural.

The rising rivalry between China and the US generates concerns around the world. In his new book (China versus the US. Who will prevail?), Alfredo Toro Hardy (Venezuelan Scholar and Diplomat) provides an insightful analysis of open questions and mysteries drawing from his life-long experience as a diplomat. In the interview below, he addresses some of the issues of concern.

New book!
Alfredo Toro Hardy (Venezuelan Scholar and Diplomat):
China versus the US. Who will prevail?
2020, World Scientific, 304 Pages. MORE INFORMATION.

Some core messages of the interview:

  • None will be ready to yield to the other.
  • The Chinese have made their aims more difficult to attain.
  • China would not accept to subordinate itself indefinitely to America’s leadership in its own part of the world.
  • Although the US possesses overall technological superiority, China will be able to match it or surpass it in a group of key technologies.
  • America’s democratic but utterly dysfunctional political system is being globally compared to China’s authoritarian but responsive one. There is no doubt that for many the latter results more attractive.
  • While globalization has allowed China to lift 800 million people out of poverty, nationalism identifies itself with the belief that the country’s ancient history and its tradition of centrality entitles it to a position of privilege.
  • Technological human displacement is not privative to China.
  • The confrontation between China and the US has become structural and not simply conjectural.

GLO Fellow Alfredo Toro Hardy, Venezuelan Scholar and Diplomat, is a former Ambassador of the Bolivarian Republic of Venezuela to the US, UK, Spain, Brazil, Chile, Ireland and Singapore.

Interview

GLO: Why has US-China competition become inevitable?

Alfredo Toro Hardy: Both countries perceive themselves as pinnacles within human history. The Middle Kingdom and the Exceptional Nation feel entitled to leadership by history or providence. Both look at the future under the lenses of their national myths. Under those circumstances none will be ready to yield to the other. Specially so as the gap in their comprehensive national power is rapidly closing.

GLO: Was China challenging the US too early?

Alfredo Toro Hardy: There seems to be no doubt that by speeding times, heralding their ambitions and boasting about their capabilities, while at the same time hardening their geopolitical and military stance, the Chinese have made their aims more difficult to attain. They have created for themselves many unnecessary problems. However, for a county as obsessed as China in continuously measuring its comprehensive national power, it would seem to be out of context to have provoked U.S. reaction if they have felt unprepared for a measurement of forces.

GLO: The obvious US response would be a long-term containment policy of China. How could this work?

Alfredo Toro Hardy: A long-term containment of China by the United States, would be the latter’s preferred option. Specially so, given the final success of this policy in relation to the Soviet Union. However, there is a big difference in both cases. During the Cold War, neither the Americans nor the Soviets challenged each other’s main spheres of influence (Cuba excepted, and this almost led to war). The contrast with the current situation is notorious. The United States’ containment of China not only includes Taiwan (which China considers to be an integral part of its territory) but takes place in an area that for millennia was a tributary dependent region of China. China would not accept to subordinate itself indefinitely to America’s leadership in its own part of the world.

GLO: You seem to suggest that China has the better cards to win the competition for world leadership, why?

Alfredo Toro Hardy: Although the United States still prevails in military, economic and technological capabilities, reverse trend in motion favor China. Economically, China’s ascendancy and its surpassing of the US seems inevitable. Militarily, China’s asymmetric power has the capacity to neutralize much of the current US superiority, while the inversely evolving budgetary capability of both countries will clearly play in favor of China. Moreover, America’s superiority in nuclear weapons may prove to be more theoretical than real if China’s overwhelming advantage in conventional ballistic missiles can match the US tactical nuclear capability, while China’s second-strike capacity can deter an American first strike. Finally, although the US possesses overall technological superiority, China will be able to match it or surpass it in a group of key technologies. On the other hand, China’s emphasis on strategically oriented basic research outweighs America’s market oriented applied research.

GLO: Globalism is under thread anyway. There is a global tendency to strengthen nationalism and autocratic regimes. A good time to popularize the Chinese model?

Alfredo Toro Hardy: Contrary to the Cold War with the USSR, America’s emerging Cold War with China is not based in ideology but in the efficiency that both countries’ models can exhibit. If we measure such efficiency by the handling of the Covid 19 pandemic, a clear difference emerges. Although the initial lack of transparency by China had a great impact in the global diffusion of the Coronavirus (and this certainly plays against its model), the extraordinary efficiency shown by this country in the domestic containment of the virus grossly contrasts with the botched response by the United States. America’s democratic but utterly dysfunctional political system is being globally compared to China’s authoritarian but responsive one. There is no doubt that for many the latter results more attractive.

GLO: In the Chinese understanding, there is complementarity of nationalism and globalization. What is the explanation?

Alfredo Toro Hardy: Chinese culture includes the complementary of opposites as exemplified by the duality of yin and yang. Within that context, globalization (so far synonymous of economic prosperity) and nationalism are seen as interdependent expressions of state policy, which converge in the aim of legitimizing the regime in the eyes of its citizens. While globalization has allowed China to lift 800 million people out of poverty, nationalism identifies itself with the belief that the country’s ancient history and its tradition of centrality entitles it to a position of privilege. Moreover, a century of humiliation by foreign powers impose the need to stand tall. This dual policy has been conceptualized under the aphorism of “grabbing with the two hands”. However, keeping the equilibrium between these forces is a daunting task. One false step, one overreach, one overreaction and everything might be blown to pieces.

GLO: Unlike the US, China’s future is burdened with its demographic problems (ageing, immigration pressure) and the need to achieve welfare increases through international trade, e.g. by importing necessary food. Is this not a challenge for the Chinese ambitions?

Alfredo Toro Hardy: With a rapidly aging population, as a result of the combination of low fertility rate and rising life expectancy, technology becomes a providential answer to the country’s quest to attain its “rejuvenation” –a nationalistic catchword that glues together the Chinese Communist Party and the Chinese population. Technology and rejuvenation thus become inseparable notions. Under those circumstances the search of economic prosperity and nationalism, the two strongest legitimizing forces of the regime, blend in their support to technology. However, even if technology “rejuvenate” the country it also displaces human labor and can significantly affect the welfare of many segments of society. Technological human displacement, though, is not privative to China. On the contrary, it is in the process of becoming one of the world’s biggest challenges of the Twenty First century. For the US, with a much larger percent of relay population and a lack of unifying national banners, this may lead to a more complex situation than China’s.

GLO: What role can the results of the forthcoming US Presidential elections play for the next phase of the US-China competition?

Alfredo Toro Hardy: I am afraid that a change in the White House may not change much. The confrontation between China and the US has become structural and not simply conjectural. Xi Jinping pursues fenfa youwei, meaning the attainment of great aims. This translates into a position of leadership in world affairs and a redefinition of its geopolitical footprint in Asia. For the United States this represents an unacceptable challenge to its leadership. In the same manner in which an expansive Chinese nationalism upholds Xi’s aims, a wide domestic coalition and an anti China popular sentiment sustain America’s reaction to that country’s assertiveness. Under those circumstances, Trump’s departure from the White House would only bring down Washington’s circus show, but not the emerging Cold War.

*************
With Alfredo Toro Hardy spoke Klaus F. Zimmermann, GLO President.

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How immigration policy affects immigrants’ sleep.

A new GLO Discussion Paper suggests that temporary migration policies may have beneficial impacts on immigrants’ sleep in the short-term.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 589, 2020

Immigration Policy and Immigrants’ Sleep. Evidence from DACA Download PDF
by
Giuntella, Osea & Lonsky, Jakub & Mazzona, Fabrizio & Stella, Luca

GLO Fellows Osea Giuntella & Jakub Lonsky

Author Abstract: Stress is associated with sleep problems. And poor sleep is linked with mental health and depression symptoms. The stress associated with immigrant status and immigration policy can directly affect mental health. While previous studies have documented a significant relationship between immigration policy and the physical and mental health of immigrants, we know little about the effects that immigration policy may have on immigrants’ sleep patterns. Exploiting the approval of the Deferred Action for Childhood Arrivals (DACA) in 2012, we study how immigrants’ sleep behavior responds to a change in immigration policy. Consistent with previous research documenting positive effects of DACA on mental health, we find evidence of a significant improvement in immigrants’ sleep in response to this policy change. However, the estimated effects of the policy quickly disappear since 2016. While temporary authorization programs, such as DACA, may have beneficial impacts on immigrants’ sleep in the short-term, the effects of temporary programs can be rapidly undermined by the uncertainty on their future. Thus, permanent legalization programs may be more effective in achieving long-term effects, eliminating any uncertainty related to the undocumented immigrant legal status.

Featured image: Photo by Jordan Whitt on unsplash

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Government aid and job matches during the COVID-19 pandemic in Denmark

A new GLO Discussion Paper using large-scale firm data for Denmark finds that government aid was effective in preserving job matches at the start of the Covid-19 pandemic.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 588, 2020

Preserving job matches during the COVID-19 pandemic: firm-level evidence on the role of government aidDownload PDF
by
Bennedsen, Morten & Larsen, Birthe & Schmutte, Ian & Scur, Daniela

GLO Fellow Ian Schmutte

Author Abstract: We analyze the impact of the COVID-19 pandemic and government policies on firms’ aid takeup, layoff and furlough decisions. We collect new survey data for 10,642 small, medium and large Danish firms, and match to government records of all aid-supported furloughed workers during the pandemic as well as administrative accounting data. This is the first representative sample of firms reporting the pandemic’s impact on their revenue and labor choices, showing a steep decline in revenue and a strong reported effect of labor aid take-up on lower job separations. Relative to a normal year, 30 percent more firms have experienced revenue declines. Comparing firms’ actual layoff and furlough decisions to their reported counterfactual decisions in the absence of aid, we estimate 81,000 fewer workers were laid off and 285,000 workers were furloughed. Our results suggest the aid policy was effective in preserving job matches at the start of the pandemic.

More from the GLO Coronavirus Cluster

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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“Teaching Norms in the Streets” — Video of the GLO Virtual Seminar with Marie Claire Villeval.

The GLO Virtual Seminar is a monthly internal GLO research event chaired by GLO Director Matloob Piracha hosted by the GLO partner institution University of Kent. The results are posted on the GLO website and the GLO News section, where also the Video of the presentation is posted. All GLO related videos are also available in the GLO YouTube channel. (To subscribe go there.)

Announcement:
August 6, 2020; London/UK at 1-2 pmSergei Guriev, Sciences Po, Paris, and GLO
The Political Economy of Populism
Registration details will be provided in time.

Report

Teaching Norms in the Streets

GLO Virtual Seminar on July 9, 2020 with Marie Claire Villeval, (CNRS & GLO). Video!!

GLO Director Matloob Piracha

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Unreported Family Workers in the Pre-Civil War United States

A new GLO Discussion Paper finds that the inclusion of family workers more than triples the free female labor force participation rate in the 1860 Census of the USA, from 16 percent to 56 percent, which is comparable to today’s rate (57 percent in 2018).

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 587, 2020

Women at Work in the Pre-Civil War United States: An Analysis of Unreported Family Workers Download PDF
by
Chiswick, Barry R. & Robinson, RaeAnn Halenda

GLO Fellow Barry R. Chiswick

Author Abstract: Rates of labor force participation in the US in the second half of the nineteenth century among free women were exceedingly (and implausibly) low, about 11 percent. This is due, in part, to social perceptions of working women, cultural and societal expectations of female’s role, and lack of accurate or thorough enumeration by Census officials. This paper develops an augmented free female labor force participation rate for 1860. It is calculated by identifying free women (age 16 and older) who were likely providing informal and unenumerated labor for market production in support of a family business, that is, unreported family workers. These individuals are identified as not having a reported occupation, but are likely to be working on the basis of the self-employment occupation of other relatives in their households. Family workers are classified into three categories: farm, merchant, and craft. The inclusion of this category of workers more than triples the free female labor force participation rate in the 1860 Census, from 16 percent to 56 percent, which is comparable to today’s rate (57 percent in 2018).

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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Brexit and immigrants’ wellbeing in the UK

A new GLO Discussion Paper suggests that following the EU Referendum Results on Brexit Non-EU migrants experienced an improvement in both mental health and life satisfaction relative to the UK natives.

The Global Labor Organization (GLO) is an independent, non-partisan and non-governmental organization that functions as an international network and virtual platform to stimulate global research, debate and collaboration.

GLO Discussion Paper No. 586, 2020

Trick or treat? The Brexit effect on immigrants’ wellbeing in the UKDownload PDF
by
Rienzo, Cinzia

GLO Fellow Cinzia Rienzo

Author Abstract: This paper is the first attempt to analyze the effect of the Brexit Referendum results on subjective well-being of immigrants living in the UK. Using the national representative UK Household Longitudinal Study (Understanding Society) data and adopting a difference-in-differences estimates, we define natives as control group, and different sub-groups of immigrants as treatment groups. The current analysis suggests that following the EU Referendum Results Non-EU migrants experienced an improvement in both mental health and life satisfaction relative to the UK natives. The results are robust to several robustness checks. Among others, we account for unobserved individual fixed effects and for unbalanced panel data. The results are consistent with the idea that the end of free movement for EU immigrants has alleviated the sense of discrimination and frustration felt by Non-EU immigrants results mainly of the toughened visa restrictions enforced since 2010 by the UK Government.

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers)Complete list of all GLO DPs – downloadable for free.

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