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Immigration, Growth and Unemployment: Panel VAR Evidence from OECD Countries

  • Boubtane, Ekrame


    (University Paris 1)

  • Coulibaly, Dramane


    (CEPII, Paris)

  • Rault, Christophe


    (University of Orléans)

This paper examines empirically the interaction between immigration and host country economic conditions. We employ panel VAR techniques to use a large annual dataset on 22 OECD countries over the period 1987-2009. The VAR approach allows to addresses the endogeneity problem by allowing the endogenous interaction between the variables in the system. Our results provide evidence of migration contribution to host economic prosperity (positive impact on GDP per capita and negative impact on aggregate unemployment, native- and foreign-born unemployment rates). We also find that migration is influenced by host economic conditions (migration responds positively to host GDP per capita and negatively to host total unemployment rate).

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6966.

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Length: 30 pages
Date of creation: Oct 2012
Date of revision:
Publication status: published in: Labour, 2013, 27 (4), 399-420
Handle: RePEc:iza:izadps:dp6966
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  1. Dolado, Juan J & Goria, Alessandra & Ichino, Andrea, 1994. "Immigration, Human Capital and Growth in the Host Country: Evidence from Pooled Country Data," Journal of Population Economics, Springer, vol. 7(2), pages 193-215.
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  16. Love, Inessa & Zicchino, Lea, 2006. "Financial development and dynamic investment behavior: Evidence from panel VAR," The Quarterly Review of Economics and Finance, Elsevier, vol. 46(2), pages 190-210, May.
  17. Bertoli, Simone & Fernández-Huertas Moraga, Jesús, 2011. "Multilateral Resistance to Migration," IZA Discussion Papers 5958, Institute for the Study of Labor (IZA).
  18. Leybourne, S J, 1995. "Testing for Unit Roots Using Forward and Reverse Dickey-Fuller Regressions," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(4), pages 559-71, November.
  19. Xavier Chojnicki & Frédéric Docquier & Lionel Ragot, 2005. "L'immigration « choisie » face aux défis économiques du vieillissement démographique," Revue économique, Presses de Sciences-Po, vol. 56(6), pages 1359-1384.
  20. Dominique M. Gross & Nicolas Schmitt, 2012. "Low- and high-skill migration flows: free mobility versus other determinants," Applied Economics, Taylor & Francis Journals, vol. 44(1), pages 1-20, January.
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  24. Silvia Helena Barcellos, 2010. "The Dynamics of Immigration and Wages," Working Papers 755, RAND Corporation Publications Department.
  25. Kaddour Hadri, 1999. "Testing For Stationarity In Heterogeneous Panel Data," Research Papers 1999_04, University of Liverpool Management School.
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  27. Marr, William L. & Siklos, Pierre L., 1994. "The link between immigration and unemployment in Canada," Journal of Policy Modeling, Elsevier, vol. 16(1), pages 1-25, February.
  28. John Y. Campbell & Pierre Perron, 1991. "Pitfalls and Opportunities: What Macroeconomists Should Know About Unit Roots," NBER Technical Working Papers 0100, National Bureau of Economic Research, Inc.
  29. L. Vanessa Smith & Stephen Leybourne & Tae-Hwan Kim & Paul Newbold, 2004. "More powerful panel data unit root tests with an application to mean reversion in real exchange rates," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(2), pages 147-170.
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