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The global economic crisis and the effect of immigration on the employment of native-born workers in Europe

Author

Listed:
  • Vincent Fromentin

    (CEREFIGE, Université de lorraine, et CREA, Université de Luxembourg)

  • Olivier Damette

    (BETA, Université de Lorraine)

  • Benteng Zou

    () (CREA, Université du Luxembourg)

Abstract

The debate regarding the economic effects of immigration has attracted renewed interest in European countries since the economic crisis. We provide an approximation for the labor market effects of immigrants in four European countries during the global economic crisis after briefly analyzing the situation of native- and foreign-born workers for the recent period. Our analysis focuses on the correlation between the stock of immigrant workers and the number of local labor market workers across several segments of the labor market using a simple model approach. Based on data from Eurostat and the LFS (Labour Force Survey), we estimate a structural dynamic model using the Generalized Method of Moments (GMM) to take into account the adjustment dynamics in the labor market and labor market segment, educational level, country of origin and gender of the workers. Overall, the empirical results suggest that the immigration shock on the employment rates of native-born workers is persistent and very weak over the business cycle. The effect is globally positive and the origin of immigrants does not appear to change the nature of the impact. We offer some explanations for these findings that are linked with the dual labor markets and the differences in the degree of substitution between native and immigrant workers.

Suggested Citation

  • Vincent Fromentin & Olivier Damette & Benteng Zou, 2014. "The global economic crisis and the effect of immigration on the employment of native-born workers in Europe," CREA Discussion Paper Series 14-22, Center for Research in Economic Analysis, University of Luxembourg.
  • Handle: RePEc:luc:wpaper:14-22
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    References listed on IDEAS

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    Keywords

    Immigration; Employment rates; European countries; dynamic panel analysis;

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