Essays in Labour Economics

This thesis consists of three distinct essays that contribute to the field of labour economics. It examines the economic impacts of international student mobility, returns to immigrant degree holders in the UK labour market, and the benefits of college education for employees in the Chinese manufacturing industry. Each empirical chapter applies microeconometric methods to to develop an empirical model on unique but yet interconnected aspects of labour economics. The findings offer valuable insights for policymakers and relevant stakeholders. Empirical chapter 1 is titled “The impact of international students on UK trade of cultural goods”. This study examines the economic impact of the influx of international students on the UK's trade in cultural goods, following the abolition of the Post Study Work (PSW) visa, which previously allowed graduates from non-EU countries to stay in the UK for at least two years after completing a UK degree. Using administrative enrolment data covering the universe of UK higher education sector spanning from 2008 to 2016, this study provides evidence that the PSW visa abolition corresponded with a 34.61% average reduction in the value of UK's cultural goods export trade to non-EU countries (relative to that to EU countries). In contrast, the PSW visa abolition had no impact on cultural goods imports. Furthermore, the PSW visa abolition had pronounced impacts on cultural goods exports to countries with lower GDP, smaller population, and higher stock of immigrants. These findings underscore the broader economic implications of policies affecting international student mobility, highlighting the need for careful consideration when avoid unintended negative consequences on cultural trade. Empirical chapter 2 is titled “Does a UK degree pay off? Evidence on immigrant labour returns under Brexit”. This chapter conducts a series of empirical analysis to investigate the impact of the 2016 Brexit referendum on the returns to immigrant UK degree holders. Using administrative data along with Difference-in-Differences (DiD) as identification strategy, we compare the EU immigrants to non-EU immigrants before and immediately after Brexit. The results indicate that Brexit significantly affected male EU immigrant workers, reducing hourly wages for those obtained UK degree by 15.54% while increasing returns for those without UK degree by 7.62%. We find no significant impact on female immigrant workers, neither with nor without a UK degree. Additionally, the negative impact is more pronounced among UK degree holders in the top quartile of the wage distribution. In contrast, there is no statistically significant effect for individuals without a UK degree in the same quartile. Empirical chapter 3 is titled “Returns to college education of Chinese manufacturing employees: Who benefits more?”. In this chapter, using the China Employer-Employee Survey (CEES) data, this study examines the returns to college education for employees across China's manufacturing industry, most of them work in small and medium-sized enterprises (SME). Our baseline model finds that while the 1999 higher education (HE) expansion has no significant impact on college enrolment for male employees, it significantly increases college enrolment for female employees by 23.7% in the manufacturing sector. College education significantly increases the returns by 45.20% for males and 88.33% for females. Moreover, there is heterogeneity in the effects by potential gains: individuals who failed to attend college would have had a higher return compared to college graduates, indicating reverse selection into HE. Further analysis reveals that the effects are more pronounced among female managers, middle birth cohorts (born between 1984 and 1987), female vocation-track degree holders, and STEM graduates. Additionally, college education facilitates employment in roles requiring cognitive skills and reduces the likelihood of female employees performing physically demanding tasks.