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

Author

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  • Francesco D'Amuri

    () (Bank of Italy)

  • Giovanni Peri

    () (UC Davis)

Abstract

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.

Suggested Citation

  • Francesco D'Amuri & Giovanni Peri, 2012. "Immigration, jobs and employment protection: evidence from Europe before and during the Great Recession," Temi di discussione (Economic working papers) 886, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_886_12
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    References listed on IDEAS

    as
    1. Michael W. L. Elsby & Bart Hobijn & Aysegul Sahin, 2010. "The Labor Market in the Great Recession," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 1-69.
    2. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages 1-33, March.
    3. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 3, pages 81-115 World Scientific Publishing Co. Pte. Ltd..
    4. Libertad Gonzalez & Francesc Ortega, 2008. "How do Very Open Economies Absorb Large Immigration Flows? Recent Evidence from Spanish Regions," Development Working Papers 248, Centro Studi Luca d'Agliano, University of Milano.
    5. David Card, 2009. "Immigration and Inequality," CReAM Discussion Paper Series 0907, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    6. 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, July.
    7. Poterba, James M & Summers, Lawrence H, 1986. "Reporting Errors and Labor Market Dynamics," Econometrica, Econometric Society, vol. 54(6), pages 1319-1338, November.
    8. 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).
    9. 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.
    10. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 145-173.
    11. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
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    More about this item

    Keywords

    immigration; jobs; task specialization; employment protection laws; Europe;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • 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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