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Immigration, jobs and employment protection: evidence from Europe before and during the Great Recession

  • Francesco D'Amuri


    (Bank of Italy)

  • Giovanni Peri


    (UC Davis)

In this paper we analyse the impact of immigrants on the type and quantity of natives� jobs. We use data on fifteen Western European countries during the 1996-2010 period. We find that immigrants, by taking up manual-routine type of occupations pushed natives towards more �complex� (abstract and communication) jobs. This job upgrade was associated with a 0.7% increase in native wages for a doubling of the immigrants� share. These results are robust to the use of an IV strategy based on the past settlement of immigrants across European countries. The job upgrade slowed, but did not come to a halt, during the Great Recession. We also document the labour market flows behind it: the complexity of jobs offered to new native hires was greater than that of lost jobs. Finally, we find evidence that the reallocation was larger in countries with more flexible labour laws.

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Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 886.

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Date of creation: Oct 2012
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Handle: RePEc:bdi:wptemi:td_886_12
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  1. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 451-477, 07.
  2. Bart Hobijn & Aysegul Sahin & Michael Elsby, 2010. "The Labor Market in the Great Recession," 2010 Meeting Papers 323, Society for Economic Dynamics.
  3. David Card, 2009. "Immigration and Inequality," NBER Working Papers 14683, National Bureau of Economic Research, Inc.
  4. Olivier Blanchard & Justin Wolfers, 1999. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," NBER Working Papers 7282, National Bureau of Economic Research, Inc.
  5. Gonzalez, Libertad & Ortega, Francesc, 2008. "How Do Very Open Economies Absorb Large Immigration Flows? Recent Evidence from Spanish Regions," IZA Discussion Papers 3311, Institute for the Study of Labor (IZA).
  6. Christian Dustmann & Albrecht Glitz & Tommaso Frattini, 2008. "The labour market impact of immigration," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 478-495, Autumn.
  7. Christian Dustmann & Tommaso Frattini & Ian Preston, 2008. "The Effect of Immigration along the Distribution of Wages," CReAM Discussion Paper Series 0803, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  8. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
  9. Giovanni Peri & Chad Sparber, 2008. "Task Specialization, Immigration, and Wages," CReAM Discussion Paper Series 0802, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  10. Ortega, Francesc & Peri, Giovanni, 2011. "The Aggregate Effects of Trade and Migration: Evidence from OECD Countries," IZA Discussion Papers 5604, Institute for the Study of Labor (IZA).
  11. Poterba, James M & Summers, Lawrence H, 1986. "Reporting Errors and Labor Market Dynamics," Econometrica, Econometric Society, vol. 54(6), pages 1319-38, November.
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