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How do very open economies adjust to large immigration flows? Recent evidence from Spanish regions

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Abstract

In recent years, Spain has received unprecedented immigration flows. Between 2001 and 2006 the fraction of the population born abroad more than doubled, increasing from 4.8% to 10.8%. For Spanish provinces with above-median inflows (relative to population), immigration increased by 24% the number of high school dropouts while only increasing college graduates by 11%. We study different channels by which regional labor markets have absorbed the large increase in relative supply of low educated workers. We identify the exogenous supply shock using historical immigrant settlement patterns by country of origin. Using data from the Labor Force Survey and the decennial Census, we find a large expansion of employment in high immigration regions. Disaggregating by industry, the absorption operated through large increases in the share of low-educated workers, compared to the same industry in low-immigration regions. We do not find changes in sectoral specialization. Overall, and perhaps surprisingly, the pattern of absorption is very similar to the one found in the US.

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  • Libertad González Luna & Francesc Ortega, 2007. "How do very open economies adjust to large immigration flows? Recent evidence from Spanish regions," Economics Working Papers 1059, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:1059
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    Cited by:

    1. Mariano Bosch & M. Carnero & Lídia Farré, 2015. "Rental housing discrimination and the persistence of ethnic enclaves," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 6(2), pages 129-152, June.
    2. Javier Vázquez-Grenno, 2012. "Job search methods in times of crisis: native and immigrant strategies in Spain," Working Papers 2012/19, Institut d'Economia de Barcelona (IEB).
    3. Jordi Jofre-Monseny (Universitat de Barcelona & Institut dEconomia de Barcelona (IEB)) & Pilar Sorribas-Navarro (Universitat de Barcelona & Institut dEconomia de Barcelona (IEB)) & Javier Vazquez-Gren, 2011. "Welfare spending and ethnic heterogeneity: Evidence from a massive immigration wave," Working Papers in Economics 269, Universitat de Barcelona. Espai de Recerca en Economia.
    4. 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.
    5. Giulia BETTIN & Alessia LO TURCO & Daniela MAGGIONI, 2011. "A firm level perspective on migration," Working Papers 360, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    6. Libertad Gonzalez & Francesc Ortega, 2013. "Immigration And Housing Booms: Evidence From Spain," Journal of Regional Science, Wiley Blackwell, vol. 53(1), pages 37-59, February.

    More about this item

    Keywords

    Immigration; Open Economies; Rybcszynski; Instrumental Variables;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • F1 - International Economics - - Trade
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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