3.6.1 Empirical Strategy: Difference in Differences
To estimate the effect of legal status acquisition on gains to intermarriage, I evaluate the relative change in gains to intermarriage before and after the EU enlargements. Uncondi- tional estimates of the before-after variation in gains to intermarriage are reported in Table (??). Column (1) reports the average gains to intermarriage by ethnic-group. The lowest gains refer to intermarriages with North African women, followed by other African nation- alities and South-West Asia nationalities. Columns (2) and (3) report the average gains to intermarriage before and after the first EU enlargement to East European countries in 2004, in turn, while the estimated before-after variation is reported in Column (4). Preliminary evidence shows a larger significant decrease in gains to intermarriage after the EU enlarge- ments for EU10 and EU2 countries compared to neither countries reformed. Despite a large heterogeneity in the effects, results document a general decrease in gains to intermarriage for all ethnic-group considered, suggesting the presence of a systematic downward trend in intermarriage propensity.
The estimated difference in gains to intermarriage between new and not new EU mem- ber countries might overestimate the causal effect of the legal status acquisition, without taking into account the presence of systematic trends in intermarriage propensity. Par-
tialling out the time trend effect including a full set of year fixed effects, estimates confirm the results described. In addition, I proxy these systematic time-trends with the evolution in the gains to intermarriage observed in not reformed countries as counterfactual. By ex- ploiting a difference-in-differences (DID) estimation strategy, I compare the relative change in gains to intermarriage in the post-enlargement periods relative to the pre-enlargements period between new EU member countries and countries for whom the legal status regu- lation did not change with the EU enlargements. Because of potential pre-announcements effects, I define the pre-post period, considering both the actual date of the accession of new EU member countries and the previous date of EU Council decision, as detailed in Figure (3.2). I estimate the following DID model:
ˆ
φij,tp =α+βNewEUj×PostTt+λj+θt+ρp+εj,tp i= N, (3.8)
where ˆφij,tp represents the estimated gains to intermarriage for the i,j couple (with i =
N), at time t in the marriage market p. The variable NewEUj is a dummy equal to one for
new EU member countries j and zero otherwise. I consider the two groups of new EU coun- tries, EU10 and EU2, separately in the estimations. The dummy variable PostTt is equal
to one for the years after the EU enlargements and zero otherwise, with T equal to 2004 and 2006 for EU10 and EU2, respectively. The variable NewEUj×PostTtrepresents their
interaction. The estimated coefficient of interest β captures the difference-in-differences be- tween the gains to intermarriage for new EU member countries as opposed to all other countries, before and after the EU enlargements, controlling for ethnic-specific, time and province heterogeneity. Ethnicity fixed effects, λj, account for systematic differences in
gains to intermarriage across migrants’ country of origin, related for example to systematic time-invariant differences in cultural values. Time fixed effects, θt, allow to control for sys-
tematic time trends in gains to intermarriage. Finally, I include province fixed effects, ρp,
to account for time invariant unobserved heterogeneity in marital selection across marriage markets. Finally, εj,tpis an error term, possibly serially correlated at the province level. I in-
terpret β as the estimated effect of the legal status acquisition on gains to intermarriage. For instance, the coefficient measures the average additional change in gains to intermarriage after the EU enlargements relative to the average additional change before EU enlargement, experienced by countries that were affected by the legal status modification compared to those who were not. Table 3.1 reports the β coefficients for the EU10 and EU2 groups, at the baseline and considering potential anticipatory effects.
Results show that legal status acquisition induced a sizeable decrease in the gains to intermarriage of 54.4% for EU10 countries, and as large as 123.5% for EU2 countries. The heterogeneity in the responses to EU enlargements points to the conclusion that legal sta- tus acquisition largely affect the value of intermarriages for those minorities that are far
from the majoritarian group, both at the economic and socio-cultural level. By account- ing for anticipatory effects of the EU enlargements, results suggest a decrease in the gains to intermarriage of 52.8% for EU10, and equal to 67.2% for EU2 countries. Interestingly, while for EU10 countries the anticipatory effects explain the entirety of the effect induced by the EU accession, for EU2 countries the anticipatory effects explain only half of the over- all response to the legal status acquisition, leaving room for potential substitution effects having occurred in the meantime. While implicitly the model in (3.8) gives equal weight to each province independently of the marriage market size, similar results are obtained using number of marriages by province-weighted least squares estimates. In the rest of the chap- ter, I present WLS estimates, unweighed ones are reported in Appendix (C.1). Further, the results are robust to the exclusion of each political-ethnic group, ruling out the possibility that estimates are driven by a particular counterfactual group of countries.
I acknowledge the fact that the exogenous variation in legal status acquisition of EU10 and EU2 countries might have led to spillovers, in terms of cross-ethnic substitution ef- fects. Hence, despite all countries having been indirectly affected by the enlargements, the intensity of the substitution might be different across groups, in relation to their economic and socio-cultural proximity with respect to new EU member countries. Despite strong evidence on substitution patterns is hard to provide without estimating the matching equi- librium, I shed some light in this direction estimating the model in (3.8) taking as counter- factual each political-ethnic group. As evidenced in Figure (6), point estimates are always negative and statistically significant, and they uncover a mild variability across political- ethnic groups, except for NorthA f rica. Panel (b) of Figure (6) shows qualitatively similar results, after accounting for anticipatory effects.
3.6.2 Flexible Difference in Differences Estimates
Equation (3.8) examines the average effect of legal status acquisition for new EU mem- ber countries, in response to the EU enlargements. The main identifying assumption is the temporal stability of potential outcomes, i.e. the conditional independence of the change in gains to intermarriage in absence of the EU enlargements. Had the EU enlargements not taken place, new EU member countries would have had the same trend in their gains to intermarriage as countries not affected by the enlargements. While this assumption is not directly testable, I provide evidence in favour of conditional independence, estimating a fully flexible DID model, as follows:
ˆ
φij,tp=ρ+βtNewEUj×Tt+λj+θt+ρp+εj,tp i=N. (3.9)
Different from equation (3.8), in this case I interact the dummy for NewEUj member
zero otherwise). The flexible DID model estimates a vector of year-specific βt coefficients,
which uncover the relationship between the legal status acquisition and the outcomes vari- able in each year, with respect to a baseline year, which I take to be 1998. According to the parallel trend assumption, I would expect the estimated βt’s to be constant for the years
before the EU enlargements. Moreover, I expect the coefficients to decrease in magnitude after the EU enlargements, with a significant drop immediately after the EU enlargements. The patterns in the intermarriage response to the legal status acquisition can be clearly seen by plotting the βtcoefficients over time, as in Figure 3.7, with relative 95% confidence inter-
vals. A clear pattern emerges from these estimates, and three important facts are worth to be mentioned. First, I do not observe any trends of the estimated interaction effects during the years immediately prior to the EU enlargements. Any systematic difference in gains to in- termarriage of EU10 and EU2 countries with respect to all other countries, remains constant over time and not statistically significant. Hence, differences in gains to intermarriage with East European women are affected by legal status acquisition only after the EU enlarge- ments, but not before. Secondly, the change in legal status induces a sharp negative effect on gains to intermarriage for EU10 after the announcement of the first EU enlargement, in line with anticipatory effects, and an even larger decrease afterwards, which remained per- sistent in the long run. Finally, estimates uncover a particular evolution of the βtcoefficients
for EU2 countries. They show a substitution effect in the propensity to intermarry between EU10 and EU2 countries, i.e. between East European countries that enter the union dur- ing the first enlargement and those that were admitted with the second enlargement. For instance, after the announcement of the first EU enlargement, EU2 countries experience a positive change in the gains to intermarriage, followed by a sharp negative and persistent effect at the moment of the second enlargement.
3.6.3 Heterogeneous Effects across Marriage Markets
So far, I document that the acquisition of the legal status by foreign women of new EU member countries induced a decrease in their gains to intermarriage. The decrease is heterogeneous and especially strong for EU2 minorities that were less integrated from a socio-economic point of view. For those minorities, intermarrying might represent a valu- able alternative to lacking or costly labor market opportunities.
In this section, I test for the potential heterogeneity in the effect of legal status across marriage markets. Across-markets heterogeneity is consistent with the hypothesis that the acquisition of the legal status might have changed the propensity to intermarry, especially in those markets where the access to labor opportunities for legalized migrants is easier or less costly. I proxy the heterogeneity in labor opportunities across markets, exploiting variability in migrants share by political-ethnic group. I argue that markets that are more
intensely populated by migrants at the same time are markets with higher labor market opportunities, in accordance with a large literature documenting that the residential seg- regation of migrants is driven by ethnic-labor network opportunities [f.e. Borjas (1995)]. As reported in Figure3.5, the migrants’ residential distribution across provinces displays a massive economic North-South divide, in line withMastrobuoni and Pinotti (2015). To study the heterogeneity in the effect of legal status acquisition, I construct a binary variable, Share Migrantsj, equal to one for provinces with a migration rate larger than the Italian
mean, by ethnic-group j, and zero otherwise19.
To rule out potential endogenous increase in migration inflows by ethnic-group and province, in response to the EU enlargements, I exploit preexisting variation in migration intensity by ethnic-group across markets. For instance, I provide evidence of a stable spa- tial distribution of migrants residential selection over time. Figure3.5shows that provinces with higher migration intensity in 1995 also had higher migration intensity in 2012, point- ing to a strong persistence in residential segregation, before and after the EU enlargements. I investigate the across-markets heterogeneity in legal status acquisition effects, comparing markets with low migration intensity as opposed to markets with high migration inten- sity, via a triple DID estimation. For instance, I augment the model in (3.8), interacting the variables with the dummy Share Migrantsj. If legal status reduces intermarriage gains by
enhancing the economic-labor prospects for legalized migrants, I could expect the decrease to be larger in more migration-attractive markets. Estimates are reported in Table 3.3. Re- sults are consistent with the hypothesis described. Indeed, the variation in the effect of the legal status acquisition on the gains to intermarriage for EU10 and EU2 is larger in markets with larger migration intensity, of 16.8% to 44.2%. Estimates are statistically significant, accounting for anticipatory affects.