This dissertation comprises four chapters that contribute to the literature on labor economics, with a particular focus on labor market challenges associated with population aging. As demographic change leads to growing labor shortages, two key strategies have emerged to mitigate its effects: increasing immigration and promoting higher labor force participation among older workers. The first two chapters focus on immigration as a potential response to workforce gaps in the elderly care sector, examining its effects on the career trajectories of native care workers, overall staffing levels, prices, and the availability of services. The third chapter examines the broader impact of immigration on worker health, with a focus on firm-level interactions between native and migrant workers. The final chapter explores how the design of unemployment insurance influences employment outcomes for older workers.
Chapter 1 examines the effect of increased foreign staffing on the labor market outcomes of native workers in Germany’s long-term care sector. Drawing on administrative social security data and employing a shift-share instrument \citep{card2001immigrant}, the chapter shows that foreign staffing helps alleviate labor shortages but has diverging effects on native workers. For those employed in the sector just before a major immigration wave, the arrival of foreign workers is associated with transitions into jobs offering better working conditions, higher wages, and non-manual tasks. In contrast, it reduces re-employment prospects for natives with prior experience in long-term care who were unemployed at the time of the inflow.
Chapter 2 analyzes how an increase in the inflow of working migrants affects prices and service provision in the long-term care sector. The identification strategy leverages a sharp rise in the number of foreign-born female residents in Germany by combining a shift-share instrument with a difference-in-differences design. Drawing on administrative data covering the universe of long-term care facilities, the chapter shows that immigration reduces the price of care across all levels of need, increases staffing levels, and expands the number of available places in nursing homes. This expansion in capacity is matched by a corresponding rise in take-up. The results can be plausibly attributed to a growing share of foreign workers in elderly care facilities and a reduction in average labor costs driven by lower wages.
Chapter 3 evaluates the impact of immigration on the incidence of severe health shocks at the workplace level. Using rich linked employer-employee data from Germany, the chapter develops a firm-level instrumental variable based on policy variation to identify the causal effect of the relative size of the foreign workforce on rates of long-term sick leave. The analysis reveals that firms with a higher share of foreign workers exhibit lower rates of long-term sickness among employees. A decomposition by gender and worker origin reveals that these health improvements are concentrated entirely among native men, particularly in blue-collar sectors. In these firms, the share of native workers performing manual tasks declines, pointing to shifts in the allocation of physically demanding roles within the workforce.
Chapter 4 investigates how the generosity of unemployment insurance (UI) affects labor market outcomes for older workers in Poland. Using administrative data covering the universe of unemployment benefit recipients and exploiting policy thresholds that create quasi-random variation in benefit levels and durations, the chapter applies regression discontinuity and difference-in-differences designs to estimate causal effects. Among the newly unemployed, more generous benefits lead to longer periods of benefit receipt and extended unemployment duration. For those still employed, increased generosity raises the likelihood of UI take-up, both through strategic re-timing of layoffs and through a sustained increase in unemployment entries over time.
