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Immigration, income and unemployment: an application of the bounds testing approach to cointegration

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  • Mete Feridun*

    (Loughborough University, U.K.)

Abstract

This study aims at investigating the nature of the causal relationship between immigration and two macroeconomic indicators, GDP per capita and unemployment, in Sweden using autoregressive distributed lag (ARDL) bounds testing procedure and Granger-causality within vector error correction model (VECM) based on annual data spanning the period between 1980 and 2004. Results of the ARDL bounds test are supportive of the theory that the variables are in a long-run equilibrium level relationship. On the other hand, results of the Granger-causality tests support the existence of a long-run, bidirectional causality between immigration and GDP per capita. However, results do not support the hypothesis that immigration causes unemployment. On the contrary, evidence suggests that unemployment causes immigration.

Suggested Citation

  • Mete Feridun*, 2007. "Immigration, income and unemployment: an application of the bounds testing approach to cointegration," Journal of Developing Areas, Tennessee State University, College of Business, vol. 41(1), pages 37-49, September.
    • Handle: RePEc:jda:journl:vol.41:year:2007:issue1:pp:37-49
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    Cited by:

    1. Mihi-Ramirez, Antonio & Sobierajc, Janusz & Garcia-Rodriguez, Yolanda, 2019. "Interaction of emigration and immigration with foreign direct investment, international trade and remittances," Economics Discussion Papers 2019-63, Kiel Institute for the World Economy (IfW Kiel).
    2. Alexandra M. Espinosa & Ignacio Díaz-Emparanza, 2023. "Assessing the Spanish immigration policy with frequency-wise causality in Hosoya’s sense," Empirical Economics, Springer, vol. 65(1), pages 111-147, July.
    3. Cansu Ünver, 2015. "Does Broadband Facilitate Immigration Flows? A Non-Linear Instrumental Variable Approach," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 4(1), pages 69-104, January.
    4. Alkhateeb, Tarek Tawfik Yousef & Alkahtani, Nasser Saad & Mahmood, Haider, 2017. "Assessing the Role of Foreign Labour on Saudi Labour Unemployment in Saudi Arabia," MPRA Paper 109449, University Library of Munich, Germany.
    5. Alexandra M. Espinosa & Ignacio Díaz-Emparanza, 2021. "The Long-term Relationship Between International Labour Migration and Unemployment in Spain," Journal of International Migration and Integration, Springer, vol. 22(1), pages 145-166, March.
    6. Nyagweta, David Tinashe, 2020. "Labour immigration, per capita income growth, and unemployment in post-apartheid South Africa," MPRA Paper 105421, University Library of Munich, Germany.
    7. Cansu Unver, 2015. "Does Broadband Facilitate Immigration Flows?," Discussion Papers 15-01, Department of Economics, University of Birmingham.
    8. Tsui, Kan Wai Hong & Tan, David & Chow, Clement Kong Wing & Shi, Song, 2019. "Regional airline capacity, tourism demand and housing prices: A case study of New Zealand," Transport Policy, Elsevier, vol. 77(C), pages 8-22.
    9. Herrera Gómez, Marcos, 2010. "Causalidad Espacial. Enfoque No Paramétrico [Spatial Causality. Non-Parametric Approach]," MPRA Paper 61326, University Library of Munich, Germany.
    10. Fariastuti Djafar, 2012. "Dynamics of Push and Pull Factors of Migrant Workers in Developing Countries: The Case of Indonesian Workers in Malaysia," Journal of Economics and Behavioral Studies, AMH International, vol. 4(12), pages 703-711.

    More about this item

    Keywords

    ARDL bounds test; Granger-causality; immigration; unemployment;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration

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