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Fear, Unemployment and Migration

  • DavidG. Blanchflower
  • Chris Shadforth

We examine the impact on the UK economy of the flow of workers from ten East European countries after their accession to the European Union. We find evidence that those most susceptible to competition from these workers have seen weaker wage inflation. We document that the presence of these foreign workers has increased the fear of unemployment and helped to contain wage pressure. We argue that this inflow of workers has increased supply by more than it has raised demand and, thus, had the effect of reducing both inflationary pressures and the natural rate of unemployment. Copyright � The Author(s). Journal compilation � Royal Economic Society 2009.

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 119 (2009)
Issue (Month): 535 (02)
Pages: F136-F182

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Handle: RePEc:ecj:econjl:v:119:y:2009:i:535:p:f136-f182
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  1. Ethan Lewis, 2005. "Immigration, skill mix, and the choice of technique," Working Papers 05-8, Federal Reserve Bank of Philadelphia.
  2. Schiopu, Ioana & Siegfried, Nikolaus, 2006. "Determinants of workers’ remittances: evidence from the European Neighbouring Region," Working Paper Series 0688, European Central Bank.
  3. Griliches, Zvi, 1969. "Capital-Skill Complementarity," The Review of Economics and Statistics, MIT Press, vol. 51(4), pages 465-68, November.
  4. David G. Blanchflower & Andrew J. Oswald, 2005. "Happiness and the Human Development Index: The Paradox of Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 38(3), pages 307-318, 09.
  5. David G. Blanchflower & Richard Freeman, 1997. "The attitudinal legacy of Communist labor relations," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 50(3), pages 438-459, April.
  6. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2004. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Population Studies Centre Discussion Papers dp-47, University of Waikato, Population Studies Centre.
  7. David G. Blanchflower, 2000. "Self-Employment in OECD Countries," NBER Working Papers 7486, National Bureau of Economic Research, Inc.
  8. Blanchflower, David G. & Saleheen, Jumana & Shadforth, Chris, 2007. "The Impact of the Recent Migration from Eastern Europe on the UK Economy," IZA Discussion Papers 2615, Institute for the Study of Labor (IZA).
  9. David Blanchflower & A Oswald, 1993. "Entrepreneurship," CEP Discussion Papers dp0134, Centre for Economic Performance, LSE.
  10. Amelie Constant & Klaus F. Zimmermann, 2007. "Circular Migration: Counts of Exits and Years away from the Host Country," SOEPpapers on Multidisciplinary Panel Data Research 40, DIW Berlin, The German Socio-Economic Panel (SOEP).
  11. David G. Blanchflower & Andrew J. Oswald, 2000. "Well-Being Over Time in Britain and the USA," NBER Working Papers 7487, National Bureau of Economic Research, Inc.
  12. Christian Dustmann & Francesca Fabbri, 2005. "Immigrants in the British labour market," Fiscal Studies, Institute for Fiscal Studies, vol. 26(4), pages 423-470, December.
  13. Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
  14. Manacorda, Marco & Manning, Alan & Wadsworth, Jonathan, 2006. "The Impact of Immigration on the Structure of Male Wages: Theory and Evidence from Britain," IZA Discussion Papers 2352, Institute for the Study of Labor (IZA).
  15. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
  16. Paul Frijters & Michael A. Shields & Stephen Wheatley Price, 2005. "Job Search Methods and Their Success: A Comparison of Immigrants and Natives in the UK," Economic Journal, Royal Economic Society, vol. 115(507), pages F359-F376, November.
  17. Dean Yang, 2006. "Why Do Migrants Return to Poor Countries? Evidence from Philippine Migrants' Responses to Exchange Rate Shocks," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 715-735, November.
  18. Sébastien Jean & Miguel Jimenez, 2007. "The Unemployment Impact of Immigration in OECD Countries," OECD Economics Department Working Papers 563, OECD Publishing.
  19. Blanchflower, David G. & Shadforth, Chris, 2007. "Entrepreneurship in the UK," Foundations and Trends(R) in Entrepreneurship, now publishers, vol. 3(4), pages 257-364, July.
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  21. David Metcalf, 2007. "Why Has the British National Minimum Wage Had Little or No Impact on Employment?," CEP Discussion Papers dp0781, Centre for Economic Performance, LSE.
  22. 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.
  23. Dustmann, Christian, 2003. "Return migration, wage differentials, and the optimal migration duration," European Economic Review, Elsevier, vol. 47(2), pages 353-369, April.
  24. Dustmann, Christian, 1994. "Return Intentions of Migrants: Theory and Evidence," CEPR Discussion Papers 906, C.E.P.R. Discussion Papers.
  25. Berndt, Ernst R & Christensen, Laurits R, 1974. "Testing for the Existence of a Consistent Aggregate Index of Labor Inputs," American Economic Review, American Economic Association, vol. 64(3), pages 391-404, June.
  26. Welch, F, 1970. "Education in Production," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 35-59, Jan.-Feb..
  27. Blanchflower, David G. & Oswald, Andrew & Stutzer, Alois, 2001. "Latent entrepreneurship across nations," European Economic Review, Elsevier, vol. 45(4-6), pages 680-691, May.
  28. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Globalization in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number bord03-1, December.
  29. Blanchflower, D., 1989. "Fear, Unemployment And Pay Flexibility," Papers 344, London School of Economics - Centre for Labour Economics.
  30. DaVanzo, Julie, 1983. "Repeat Migration in the United States: Who Moves Back and Who Moves On?," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 552-59, November.
  31. Christian Dustmann & Yoram Weiss, 2007. "Return Migration: Theory and Empirical Evidence from the UK," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 236-256, 06.
  32. Drinkwater, Stephen & Eade, John & Garapich, Michal, 2006. "Poles Apart? EU Enlargement and the Labour Market Outcomes of Immigrants in the UK," IZA Discussion Papers 2410, Institute for the Study of Labor (IZA).
  33. Zaiceva, Anzelika, 2006. "Reconciling the Estimates of Potential Migration into the Enlarged European Union," IZA Discussion Papers 2519, Institute for the Study of Labor (IZA).
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