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Immigration, Jobs and Employment Protection: Evidence from Europe before and during the Great Recession

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  • D'Amuri Francesco
  • Giovanni Peri

    (Department of Economics, University of California Davis)

Abstract

n this paper we analyze the impact of immigrants on the type and quantity of native jobs. We use data on fifteen Western European countries during the 1996-2010 period. We find that immigrants, by taking manual-routine type of occupations pushed natives towards more "complex" (abstract and communication) jobs. Such positive reallocation occurred while the total number of jobs held by natives was unaffected. This job upgrade was associated in the short run to a 0.6% increase in native wages for a doubling of the immigrants' share. These results are robust to the use of two alternative IV strategies based on past settlement of immigrants across European countries measured alternatively with Census or Labor Force data. The job upgrade slowed, but did not come to a halt, during the Great Recession. We also document the labor market flows behind it: the complexity of jobs offered to new native hires was higher relative to the complexity of lost jobs. Finally, we find evidence that such reallocation was significantly larger in countries with more flexible labor laws and that his tendency was particularly strong for less educated workers.

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Bibliographic Info

Paper provided by University of California, Davis, Department of Economics in its series Working Papers with number 1215.

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Length: 47
Date of creation: 19 Jun 2012
Date of revision:
Handle: RePEc:cda:wpaper:12-15

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Keywords: Immigration; Jobs; Task specialization; Employment Protection Laws; Europe;

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  1. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2004. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Population Studies Centre Discussion Papers, University of Waikato, Population Studies Centre dp-47, University of Waikato, Population Studies Centre.
  2. Christian Dustmann & Tommaso Frattini & Ian Preston, 2008. "The Effect of Immigration along the Distribution of Wages," CReAM Discussion Paper Series 0803, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. 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).
  4. David Card, 2009. "Immigration and Inequality," CReAM Discussion Paper Series 0907, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  5. 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.
  6. 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, Royal Economic Society, vol. 110(462), pages C1-33, March.
  7. Giovanni Peri & Chad Sparber, 2008. "Task Specialization, Immigration, and Wages," CReAM Discussion Paper Series 0802, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Daron Acemoglu & David Autor, 2010. "Skills, Tasks and Technologies: Implications for Employment and Earnings," NBER Working Papers 16082, National Bureau of Economic Research, Inc.
  9. Libertad González & Francesc Ortega, 2008. "How Do Very Open Economies Absorb Large Immigration Flows? Recent Evidence from Spanish Regions," Economic Reports 06-08, FEDEA.
  10. Poterba, James M & Summers, Lawrence H, 1986. "Reporting Errors and Labor Market Dynamics," Econometrica, Econometric Society, Econometric Society, vol. 54(6), pages 1319-38, November.
  11. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The labour market impact of immigration," Oxford Review of Economic Policy, Oxford University Press, Oxford University Press, vol. 24(3), pages 478-495, Autumn.
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