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Immigration, jobs and employment protection: evidence from Europe before and during the Great Recession

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  • Francesco D'Amuri

    ()
    (Bank of Italy)

  • Giovanni Peri

    ()
    (UC Davis)

Abstract

In this paper we analyse the impact of immigrants on the type and quantity of natives’ jobs. We use data on fifteen Western European countries during the 1996-2010 period. We find that immigrants, by taking up manual-routine type of occupations pushed natives towards more “complex” (abstract and communication) jobs. This job upgrade was associated with a 0.7% increase in native wages for a doubling of the immigrants’ share. These results are robust to the use of an IV strategy based on the past settlement of immigrants across European countries. The job upgrade slowed, but did not come to a halt, during the Great Recession. We also document the labour market flows behind it: the complexity of jobs offered to new native hires was greater than that of lost jobs. Finally, we find evidence that the reallocation was larger in countries with more flexible labour laws.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 886.

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Date of creation: Oct 2012
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Handle: RePEc:bdi:wptemi:td_886_12

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Keywords: immigration; jobs; task specialization; employment protection laws; Europe;

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  1. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March.
  2. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 145-173.
  3. Giovanni Peri & Chad Sparber, 2009. "Task Specialization, Immigration and Wages," Working Papers 91, University of California, Davis, Department of Economics.
  4. Michael Elsby & Bart Hobjin & Aysegül Sahin, 2010. "The labor market in the Great Recession," Working Paper Series 2010-07, Federal Reserve Bank of San Francisco.
  5. Ortega, Francesc & Peri, Giovanni, 2011. "The Aggregate Effects of Trade and Migration: Evidence from OECD Countries," IZA Discussion Papers 5604, Institute for the Study of Labor (IZA).
  6. Daron Acemoglu & David Autor, 2010. "Skills, Tasks and Technologies: Implications for Employment and Earnings," NBER Working Papers 16082, National Bureau of Economic Research, Inc.
  7. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 451-477, 07.
  8. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The labour market impact of immigration," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 478-495, Autumn.
  9. Libertad Gonzalez & Francesc Ortega, 2008. "How do Very Open Economies Absorb Large Immigration Flows? Recent Evidence from Spanish Regions," Development Working Papers 248, Centro Studi Luca d\'Agliano, University of Milano.
  10. David Card, 2009. "Immigration and Inequality," American Economic Review, American Economic Association, vol. 99(2), pages 1-21, May.
  11. Poterba, James M & Summers, Lawrence H, 1986. "Reporting Errors and Labor Market Dynamics," Econometrica, Econometric Society, vol. 54(6), pages 1319-38, November.
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