Employment Protection and Migration
AbstractInteractions between social policies and migration are numerous. This paper proposes to analyze the influence of employment protection on bilateral migration. We show theoretically how employment protection may affect the probability to migrate, depending on (i) the effect of employment protection on wages, (2) the effect on the probability to be employed, and (3) relative preferences over wages or employment. Empirically, we show that employment protection differential between source and destination countries is an important determinant of bilateral migration. Bilateral migration of workers is negatively affected by this differential of employment protection. This effect is stronger for high-skilled workers. We also find that the effect of the differential is largely explained by the level of employment protection in destination countries. This factor does not have a significant impact in origin countries. These results are obtained controling econometrically for the high proportion of zero using Heckman two steps procedure. Overall, we find that, contrary to the conventional wisdom, migrants are not attracted by protective legislation. On the contrary, they tend to move where this protection is closer to the one of their origin country.
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Date of creation: 01 Apr 2010
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Migration; employment protection; labour markets;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-11 (All new papers)
- NEP-LAB-2010-06-11 (Labour Economics)
- NEP-MIG-2010-06-11 (Economics of Human Migration)
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