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The effect of mass influx on labor markets: Portuguese 1974 evidence revisited

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  • Mäkelä, Erik

Abstract

This paper provides a reappraisal of the evidence from the influx that has been unique in the recent European history, the flood of half a million returnees from Mozambique and Angola to Portugal in the mid-1970s. The objective of this paper is to study the impacts of a large supply shock on aggregate labor productivity, wages and unemployment. In contrast to the previous evidence, the synthetic control analyses find that the influx had a significant adverse effect on labor market outcomes. The results suggest that the Portuguese labor market responded precisely the same way as the standard textbook model predicts: an increase in the number of workers lowered average labor productivity and wages.

Suggested Citation

  • Mäkelä, Erik, 2017. "The effect of mass influx on labor markets: Portuguese 1974 evidence revisited," European Economic Review, Elsevier, vol. 98(C), pages 240-263.
  • Handle: RePEc:eee:eecrev:v:98:y:2017:i:c:p:240-263
    DOI: 10.1016/j.euroecorev.2017.06.016
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