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Do Foreigners Replace Native Immigrants? Evidence from a Panel Cointegration Analysis

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Author Info

  • Brücker, Herbert

    ()
    (Institute for Employment Research (IAB), Nuremberg)

  • Fachin, Stefano

    ()
    (Sapienza University of Rome)

  • Venturini, Alessandra

    ()
    (University of Turin)

Abstract

This paper examines the impact of the immigration of foreigners on domestic labour mobility. Since David Card's seminal study on the regional labour market impact of the Mariel Boatlift it is controversial whether domestic labour mobility equilibrates economic conditions across cities and regions. However, there is little or no evidence that natives leave destinations where migrants tend to cluster. In this paper we reconcile the existing evidence by taking another route. We analyze whether the immigration of foreigners replaces domestic mobility from poor to rich regions. We focus on Italy, which is characterized by market differences in earnings between the North and the South. Based on a panel cointegration approach we exploit the variance of international and internal migration over time for identifying potential displacement effects. The main finding is that, conditional on unemployment and wage differentials, the share of foreign workers in the labour force of the destination regions discourages internal labour mobility significantly. As a consequence, spatial correlation studies which use the variance of the foreigner share across region for identifying the wage and employment effects of immigration, tend to understate the actual immigration impact.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4438.

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Length: 32 pages
Date of creation: Sep 2009
Date of revision:
Publication status: published in: Economic Modelling, 2010, 2011, 28 (3), 1078 - 1089
Handle: RePEc:iza:izadps:dp4438

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Related research

Keywords: international migration; domestic migration; labour markets; panel cointegration; Italy;

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Cited by:
  1. Francesca Di Iorio & Stefano Fachin, 2011. "A sieve bootstrap range test for poolability in dependent cointegrated panels," DSS Empirical Economics and Econometrics Working Papers Series 2011/2, Centre for Empirical Economics and Econometrics, Department of Statistics, "Sapienza" University of Rome.
  2. Peter Huber & Gabriele Tondl, 2012. "Migration and Regional Convergence in the European Union," WIFO Working Papers 419, WIFO.
  3. Mocetti, Sauro & Porello, Carmine, 2010. "How does immigration affect native internal mobility? New evidence from Italy," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 427-439, November.
  4. Sona Kalantaryan, 2013. "Housing Market Responses to Immigration; Evidence from Italy," RSCAS Working Papers 2013/83, European University Institute.
  5. Riccardo Faini & Steiner Strom & Alessandra Venturini & Claudia Villosio, 2009. "Are Foreign Migrants more Assimilated than Native Ones?," LABORatorio R. Revelli Working Papers Series 96, LABORatorio R. Revelli, Centre for Employment Studies.
  6. Alessandra Venturini, 2012. "Methodological Aspects of Research on Flows Human Capital Flows: A survey," RSCAS Working Papers carim2012/01, European University Institute.
  7. Steinar Strøm & Alessandra Venturini & Claudia Villosio, 2013. "Wage assimilation: migrants versus natives and foreign migrants versus internal migrants," RSCAS Working Papers 2013/30, European University Institute.

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