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How Immigration Grease Is Affected by Economic, Institutional and Policy Contexts: Evidence from EU Labor Markets

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  • Martin Guzi

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Abstract

Theoretical arguments and previous country-level evidence indicate that immigrants are more fluid than natives in responding to changing labor shortages across countries, skill-groups or industries. The diversity across EU member states enables us to test this hypothesis across various institutional, economic and policy contexts. Drawing on the EU LFS and EU SILC datasets we study the relationship between residual wage premia as a measure of labor shortages in different skill-industry-country cells and the shares of migrants and natives working in these cells. We find that immigrants’ responsiveness to labor market shortages exceeds that of natives in the EU15, in particular in member states with higher unemployment rates, higher levels of (recent) immigration, and more open immigration and integration policies; but also those with barriers to citizenship acquisition or family reunification. Whereas higher welfare expenditures seem to exert a lock-in effect, a comparison across different types of welfare states indicates that institutional complementarities neutralize that effect.

Suggested Citation

  • Martin Guzi, 2017. "How Immigration Grease Is Affected by Economic, Institutional and Policy Contexts: Evidence from EU Labor Markets," Discussion Papers 45, Central European Labour Studies Institute (CELSI).
  • Handle: RePEc:cel:dpaper:45
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    References listed on IDEAS

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    1. Corrado Giulietti & Martin Guzi & Martin Kahanec & Klaus F. Zimmermann, 2013. "Unemployment benefits and immigration: evidence from the EU," International Journal of Manpower, Emerald Group Publishing, vol. 34(1), pages 24-38, March.
    2. George J. Borjas, 2001. "Does Immigration Grease the Wheels of the Labor Market?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 32(1), pages 69-134.
    3. Francesco D'Amuri & Giovanni Peri, 2016. "Immigration, Jobs, And Employment Protection: Evidence From Europe Before And During The Great Recession," World Scientific Book Chapters,in: The Economics of International Migration, chapter 5, pages 153-185 World Scientific Publishing Co. Pte. Ltd..
    4. Constant, Amelie F. & Gataullina, Liliya & Zimmermann, Klaus F., 2009. "Ethnosizing immigrants," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 274-287, March.
    5. Jessica Bennett & Seamus McGuinness, 2009. "Assessing the impact of skill shortages on the productivity performance of high-tech firms in Northern Ireland," Applied Economics, Taylor & Francis Journals, vol. 41(6), pages 727-737.
    6. Martin Kahanec & Anzelika Zaiceva, 2009. "Labor market outcomes of immigrants and non-citizens in the EU: An East-West comparison," International Journal of Manpower, Emerald Group Publishing, vol. 30(1/2), pages 97-115, March.
    7. Jo Ritzen & Klaus Zimmermann, 2014. "A vibrant European labor market with full employment," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-24, December.
    8. Glenda Quintini, 2011. "Over-Qualified or Under-Skilled: A Review of Existing Literature," OECD Social, Employment and Migration Working Papers 121, OECD Publishing.
    9. Neugart, Michael & Schömann, Klaus, 2002. "Employment outlooks: Why forecast the labour market and for whom?," Discussion Papers, Research Unit: Labor Market Policy and Employment FS I 02-206, Social Science Research Center Berlin (WZB).
    10. Jianmin Tang & Weimin Wang, 2005. "Product Market Competition, Skill Shortages and Productivity: Evidence from Canadian Manufacturing Firms," Journal of Productivity Analysis, Springer, vol. 23(3), pages 317-339, July.
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    Cited by:

    1. repec:wfo:wstudy:59156 is not listed on IDEAS
    2. Martin Kahanec & Mariola Pytliková, 2017. "The economic impact of east–west migration on the European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(3), pages 407-434, August.
    3. Martin Kahanec & Martin Guzi, 2017. "How immigrants helped EU labor markets to adjust during the Great Recession," International Journal of Manpower, Emerald Group Publishing, vol. 38(7), pages 996-1015, October.

    More about this item

    Keywords

    labor supply; skill matching; migration; labor shortage; welfare state; institutions; policy;

    JEL classification:

    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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