Boris Kaiser

The Effects of Immigration on Wages: An Application of the Structural Skill-Cell Approach

SummaryThis paper investigates how recent immigration inflows from 2002 to 2008 have affected wages in Switzerland. This period is of particular interest as it marks the time during which the bilateral agreement with the EU on the free cross-border movement of workers has been effective. Since different types of workers are likely to be unevenly affected by recent immigration inflows, we follow the “structural skill-cell approach” as for example employed by Borjas (2003) and Ottaviano and Peri (2008). This paper provides two main contributions. First, we estimate empirically the elasticities of substitution between different types of workers in Switzerland. Our results suggest that natives and immigrants are imperfect substitutes. Regarding different skill levels, the estimates indicate that workers are imperfect substitutes across broad education groups and across different experience groups. Second, the estimated elasticities of substitution are used to simulate the impact on domestic wages using the actual immigration inflows from 2002 to 2008. For the long run, the simulations produce some notable distributional consequences across different types of workers: While previous immigrants incur wage losses (−1.6%), native workers are not negatively affected on average (+0.4%). In the short run, immigration has a negative macroeconomic effect on the average wage, which, however, gradually dies out in the process of capital adjustment.

Does Physician Dispensing Increase Drug Expenditures? Empirical Evidence from Switzerland

This paper analyzes whether the opportunity for physicians to dispense drugs increases healthcare expenditures. We study the case of Switzerland, where dispensing physicians face financial incentives to overprescribe and sell more expensive pharmaceuticals. Using comprehensive physician-level data, we exploit the regional variation in the dispensing regime to estimate causal effects. The empirical strategy consists of a doubly-robust estimation that combines inverse probability weighting with regression. Our main finding suggests that dispensing leads to higher drug costs on the order of 34% per patient.

Healthcare Demand in the Presence of Discrete Price Changes

Deductibles in health insurance generate nonlinear budget sets and dynamic incentives. Using detailed individual health expenditure data from a Swiss health insurer, we estimate the response in healthcare demand to the discrete price increase generated by resetting the deductible at the start of each calendar year. We find that for individuals with high deductibles, healthcare demand drops by 27%. The decrease is most pronounced for inpatient care and prescription drugs. By contrast, for individuals with low deductibles, there is no significant change in healthcare demand (except for prescription drugs). Overall our results suggest that healthy individuals respond much stronger to the price change.

Detailed decompositions in nonlinear models

We propose a new approach for performing detailed decompositions of average outcome differentials when outcome models are nonlinear. The method can be flexibly applied to all generalized linear models, which are widely used in empirical research. The advantage over other approaches in the literature is that the effects of group-specific differences in covariate distributions are taken into account. At the same time, desirable features such as path independence are still satisfied. A simulation exercise demonstrates that our decomposition method produces more convincing results than existing methods.

The skill-biased effects of exchange rate fluctuations

This paper examines the linkages between real exchange rate movements and firms’ skill demand. Real exchange rate movements may affect unskilled workers differently than skilled workers because of skill-specific adjustment costs, or because exchange rates lead to changes in relative factor prices and firms’ competition intensity. Using panel data on Swiss manufacturers, we find that an appreciation increases high-skilled and reduces low-skilled employment in most firms, while total employment remains roughly unchanged. We find evidence that exchange rates influence firms’ skill intensity because they affect outsourcing activities, innovation efforts, and firms’ compensation schemes.

Gender-specific practice styles and ambulatory health care expenditures

This paper explores the role of physician gender in the expenditures for ambulatory care as a potential source of practice style variation. We exploit a large doctor–patient panel dataset based on insurance-claims data from Switzerland to estimate the effect of physician gender on health care expenditures. We find considerable heterogeneity across specialties. In primary care, female doctors are found to produce similar overall expenditures per visit as their male colleagues, but significantly smaller prescribing costs and significantly higher laboratory costs. In secondary-care specialties, we find that women generate lower overall expenditures, which is mainly driven by consultation costs. These findings provide evidence for the existence of sex-specific practice styles that translate into different overall expenditures as well as different compositions of these expenditures.