Immigration, Search and Lost of Skill.

This paper analyzes the process of entry into the Israeli labor market among a panel of highly skilled immigrants who moved from the former USSR to Israel. We estimate a nonstationary, finite horizon search model with exogenous wage growth that is capable of capturing the main features of this process; a speedy entry into the labor force, an initial phase of work at low skill occupations, a gradual occupational upgrading and a sharp increase in wages. The estimated parameters of the model, together with information on the wages of immigrants from earlier waves, allow us to predict an occupational path and associated wages, for each new immigrant, from the time of arrival until retirement.