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By exploiting a commuting policy that led to a sharp and unexpected inflow of Czech workers to areas along the German-Czech border, we examine the impact of an exogenous immigration-induced labor supply shock on local wages and employment of natives. On average, the supply shock leads to a moderate decline in local native wages and a sharp decline in local native employment. These average effects mask considerable heterogeneity across groups: while younger natives experience larger wage effects, employment responses are particularly pronounced for older natives. This pattern is inconsistent with standard models of immigration but can be accounted for by a model that allows for a larger labor supply elasticity or a higher degree of wage rigidity for older than for young workers. We further show that the employment response is almost entirely driven by diminished inflows of natives into work rather than outflows into other areas or nonemployment, suggesting that “outsiders” shield “insiders” from the increased competition.

Lacking lifetime income data, most intergenerational mobility estimates are subject to lifecycle bias. Using long income series from Sweden and the US, we illustrate that standard correction methods struggle to account for one important property of income processes: children from affluent families experience faster income growth, even conditional on their own characteristics. We propose a lifecycle estimator that captures this pattern and performs well across different settings. We apply the estimator to study mobility trends, including for recent cohorts that could not be considered in prior work. Despite rising income inequality, intergenerational mobility remained largely stable in both countries.

We quantify intergenerational and assortative processes by comparing different degrees of kinship within the same generation. This “horizontal” approach yields more, and more distant kinship moments than traditional methods, which allows us to account for the transmission of latent advantages in a detailed intergenerational model. Using Swedish registers, we find strong persistence in the latent determinants of status, and a striking degree of sorting—to explain the similarity of distant kins, assortative matching must be much stronger than previously thought. Latent genetic influences explain little of the variance in educational attainment, and sorting occurs primarily in non-genetic factors.

Most studies on the labor market effects of immigration use repeated cross-sectional data to estimate the effects of immigration on regions. This paper shows that such regional effects are composites of effects that address fundamental questions in the immigration debate but remain unidentified with repeated cross-sectional data. We provide a unifying empirical framework that decomposes the regional effects of immigration into their underlying components and show how these are identifiable from data that track workers over time. Our empirical application illustrates that such analysis yields a far more informative picture of immigration's effects on wages, employment, and occupational upgrading.