Eva Moreno-Galbis (1), Giuseppe Attanasi (2)
Cecilia Garcia-Peñalosa: cecilia.garcia-penalosa[at]univ-amu.fr
Mathieu Faure: mathieu.faure[at]univ-amu.fr
Kenan Huremovic: kenan.huremovic[at]univ-amu.fr
(1) Immigrants are newcomers in a labor market. As a consequence, they lack host-country specific labor market knowledge and other country-specific and not directly productive valuable assets affecting their relative bargaining position with employers. We introduce this simple observation into a search and matching model of the labor market and show that immigrants increase the employment prospects of competing natives. To test the predictions of our model, we exploit yearly variations between 1998 and 2004 in the share of immigrants within occupations in 13 European countries. We identify the impact of immigrants on natives' employment rate using an instrumental variable strategy based on historical settlement patterns across host countries and occupations by origin country. We find that natives' employment rate increases in occupations and sectors receiving more immigrants. Moreover, we show that this effect varies depending on immigrants' characteristics and on host country labor market institutions which affect relative reservation wages.
(2) Experimental evidence suggests that agents in social dilemmas have belief-dependent, other regarding preferences. But in experimental games such preferences cannot be common knowledge, because subjects play with anonymous co-players. We address this issue theoretically and experimentally in the context of a trust game, assuming that the trustees choice may be affected by a combination of guilt aversion and intention-based reciprocity. We recover trustees belief-dependent preferences from their answers to a structured questionnaire. In the main treatment, the answers are disclosed and made common knowledge within each matched pair. Our main auxiliary assumption is that such disclosure approximately implements a psycho- logical game with complete information. To organize the data, we classify subjects according to their elicited preferences, and test predictions for the two treatments. We nd that guilt aversion is the prevalent psychological motivation, and that behavior and elicited beliefs move in the direction predicted by the theory.