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Fear, Unemployment and Migration

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  • David G. Blanchflower
  • Chris Shadforth

Abstract

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.

Suggested Citation

  • David G. Blanchflower & Chris Shadforth, 2009. "Fear, Unemployment and Migration," Economic Journal, Royal Economic Society, vol. 119(535), pages 136-182, February.
    • Handle: RePEc:wly:econjl:v:119:y:2009:i:535:p:f136-f182
    DOI: 10.1111/j.1468-0297.2008.02224.x
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    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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