Hobi, Lukas (2023). Essays on poverty and labor market integration for refugees. (Thesis). Universität Bern, Bern

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Abstract

The first part of this thesis is dedicated to the study of poverty. In many countries, it is difficult to study subnational poverty patterns, as official statistics often rely on surveys with limited ability to disaggregate regionally. This is a drawback because the social and economic structure varies within countries, which has a significant impact on poverty. To address poverty, it is therefore important to further understand urban / rural differences. In this context, administrative data-based approaches offer new opportunities. Chapter 1 contributes to the field of territorial poverty studies by using linked tax data to examine poverty in a large political district in Switzerland with 1 million inhabitants and rural and urban parts. We measure poverty using income and financial reserves (asset-based poverty) and examine poverty in urban and rural areas. By doing so we can compare the social structure of the poor in detail. We then use random forest based variable importance analysis to see whether the importance of poverty risks factors differs in urban and rural parts. We can show that poor people in rural areas are more likely to be of retirement age compared to the urban parts. Among the workforce, the share of poor is larger for those who work in agriculture compared to those working in industry or the service sector. In urban areas, the poor are more often freelancers and people of foreign origin. Despite on where they live, people with no or little education, single parents, and people working in gastronomy / tourism are disproportionately often poor. With respect to risk factors, we find that the general opportunity structure like density of workplaces or aggravated access in mountain areas seem to be of minor importance compared to risk factors that relate to the immediate social situation. Low attachment to the labor market is by far the most important characteristic predicting poverty on the household level. However, the sector of occupation is of big importance too. Since the possibilities to engage in a specific occupation are linked to the regional opportunity structure, this result fosters the argument that territorial opportunities matter. It is also important to understand poverty as a dynamic phenomenon and observe it over multiple periods, since short, long, or recurring poverty episodes have diverse implications for the persons experiencing them and the policies to address them. Chapter 2 contributes to the longitudinal poverty literature by analyzing the same dataset for the years 2012 - 2015. Weagain measure both income poverty and asset-based poverty. Exploring the data for the 2012 income poor cohort graphically, we find that asset-based poverty is the more dynamic state, with many exits to non-poverty over the observed four years, whereas exits from income poverty to non-poverty are rarer. Poor persons of working age and children generally lack financial reserves but escape poverty more frequently. While poor pensioners usually have financial assets but are less likely to escape poverty. We use dynamic linear panel data models to measure how the social benefit system, labor market participation, and asset consumption influence poverty status and to estimate poverty persistence. An increase of the wage of a household's main or secondary earner reduces the probability of being poor the most, while pensions and incomes from real estate are also important to reduce poverty for pensioners. We find that poverty in Switzerland is a persistent phenomenon, with the probability of being income poor in the current year increasing by 21.7 percentage points for the working age population and children (29.1 percentage points for pensioners) and the probability of being asset-based poor in the current year increasing by 19 percentage points for the working age population and children (30.5 percentage points for pensioners) if an individual has been income or asset-based poor in the previous year. The last part of this thesis is dedicated to labor market integration for refugees in Switzerland, which is closely tied to poverty. Chapters 1 and 2 show that a strong labor market attachment is important to protect against poverty regardless of area or even life cycle. This is even more so for refugees. Refugees usually cannot fall back on an array of social insurances, like natives can. Given that they have fled their origin country and sought refuge in a host country, refugees are also unlikely to possess financial reserves. Yet, compared to native job seekers, refugees face several additional barriers, e.g., lacking knowledge of the local language, trauma or discrimination to name a few. Given these difficulties it is interesting to know which strategies work best to ensure a rapid and durable labor market integration of refugees. In Chapter 3 we look at two Swiss active labor market programs (ALMPs) targeted at refugees. Both programs are offered by the same ALMP provider. While the first program targets all client skill levels, the second program targets only "mid- to high-skilled" clients. This introduces a skill-split between the two programs, whereas in the period preceding the second program's introduction (i.e., the pre-period) all client skill levels were served in the first program. The first program is characterized by a lower caseload per job coach relative to the pre-period, while the second program is characterized by richer funding and more flexibility regarding the use of program funds relative to the pre-period. To assess the impact of the two different program strategies we link program data to administrative data on employment and earnings. We use balancing to replicate "high-skilled" and "low-skilled" client groups in the pre-period. We then use event-study analysis and difference-in-differences estimation to study how clients in the two programs performed in terms of employment rate and income relative to their skill-level counterparts in the pre-period. In our event-study analysis, we find that the additional resources helped improve labor market outcomes on both ALMPs. However, we find larger effects for the lowered mean caseload for the job coaches working with the "lower-skilled" refugees than for the richer funding and more flexible use of funds on the program working with the "higher-skilled" refugees. Effects take hold sooner following program entry for the "lower-skilled" group. We find a statistically significant difference-in-differences estimate only for the employment rate for the "lower-skilled" group which increased by 9.4 percentage points in the short-run.

Item Type:	Thesis
Dissertation Type:	Cumulative
Date of Defense:	21 September 2023
Subjects:	300 Social sciences, sociology & anthropology 300 Social sciences, sociology & anthropology > 330 Economics 300 Social sciences, sociology & anthropology > 360 Social problems & social services
Institute / Center:	03 Faculty of Business, Economics and Social Sciences > Department of Economics
Depositing User:	Hammer Igor
Date Deposited:	08 Apr 2025 16:02
Last Modified:	08 Apr 2025 22:25
URI:	https://boristheses.unibe.ch/id/eprint/5986

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