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How do very open economies adjust to large immigration flows? Recent evidence from Spanish regions

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Abstract

In recent years, Spain has received unprecedented immigration flows. Between 2001 and 2006 the fraction of the population born abroad more than doubled, increasing from 4.8% to 10.8%. For Spanish provinces with above-median inflows (relative to population), immigration increased by 24% the number of high school dropouts while only increasing college graduates by 11%. We study different channels by which regional labor markets have absorbed the large increase in relative supply of low educated workers. We identify the exogenous supply shock using historical immigrant settlement patterns by country of origin. Using data from the Labor Force Survey and the decennial Census, we find a large expansion of employment in high immigration regions. Disaggregating by industry, the absorption operated through large increases in the share of low-educated workers, compared to the same industry in low-immigration regions. We do not find changes in sectoral specialization. Overall, and perhaps surprisingly, the pattern of absorption is very similar to the one found in the US.

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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1059.

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Date of creation: Nov 2007
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Handle: RePEc:upf:upfgen:1059

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Web page: http://www.econ.upf.edu/

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Keywords: Immigration; Open Economies; Rybcszynski; Instrumental Variables;

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  1. Gianmarco I.P. Ottaviano & Giovanni Peri, 2004. "The Economic Value of Cultural Diversity: Evidence from US Cities," NBER Working Papers 10904, National Bureau of Economic Research, Inc.
  2. Rachel M. Friedberg & Jennifer Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 23-44, Spring.
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  4. Barry Chiswick & Timothy J.. Hatton, 2003. "International Migration and the Integration of Labor Markets," NBER Chapters, in: Globalization in Historical Perspective, pages 65-120 National Bureau of Economic Research, Inc.
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  10. Amuedo-Dorantes, Catalina & de la Rica, Sara, 2005. "Immigrants' Responsiveness to Labor Market Conditions and Its Implications on Regional Disparities: Evidence from Spain," IZA Discussion Papers 1557, Institute for the Study of Labor (IZA).
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  15. Hanson, Gordon H. & Slaughter, Matthew J., 2002. "Labor-market adjustment in open economies: Evidence from US states," Journal of International Economics, Elsevier, vol. 57(1), pages 3-29, June.
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  17. Ethier, Wilfred, 1972. "Nontraded Goods and the Heckscher-Ohlin Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(1), pages 132-47, February.
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Cited by:
  1. Libertad Gonzalez & Francesc Ortega, 2009. "Immigration and Housing Booms: Evidence from Spain," CReAM Discussion Paper Series 0919, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  2. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The Labour Market Impact of Immigration," CReAM Discussion Paper Series 0811, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  3. Bosch, Mariano & Carnero, M. Angeles & Farré, Lídia, 2011. "Rental Housing Discrimination and the Persistence of Ethnic Enclaves," IZA Discussion Papers 5583, Institute for the Study of Labor (IZA).
  4. Javier Vázquez-Grenno, 2012. "Job search methods in times of crisis: native and immigrant strategies in Spain," Working Papers 2012/19, Institut d'Economia de Barcelona (IEB).
  5. Giulia BETTIN & Alessia LO TURCO & Daniela MAGGIONI, 2011. "A firm level perspective on migration," Working Papers 360, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  6. Jordi Jofre-Monseny & Pilar Sorribas-Navarro & Javier Vázquez-Grenno, 2011. "Welfare spending and ethnic heterogeneity: evidence from a massive immigration wave," Working Papers 2011/34, Institut d'Economia de Barcelona (IEB).

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