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Migration as an Adjustment Mechanism in the Crisis? A Comparison of Europe and the United States 2006-2016

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  • Jauer, Julia
  • Liebig, Thomas
  • Martin, John P.
  • Puhani, Patrick A.

Abstract

We estimate whether migration can be an equilibrating force in the labour market by comparing pre- and post-crisis migration movements at the regional level in both Europe and the United States, and their association with asymmetric labour market shocks. Based on fixedeffects regressions using regional panel data, we find that Europe’s migratory response to unemployment shocks was almost identical to that recorded in the United States after the crisis. Our estimates suggest that, if all measured population changes in Europe were due to migration for employment purposes – i.e. an upper-bound estimate – up to about a quarter of the asymmetric labour market shock would be absorbed by migration within a year. However, in Europe and especially in the Eurozone, the reaction to a very large extent stems from migration of recent EU accession country citizens as well as of third-country nationals.

Suggested Citation

  • Jauer, Julia & Liebig, Thomas & Martin, John P. & Puhani, Patrick A., 2018. "Migration as an Adjustment Mechanism in the Crisis? A Comparison of Europe and the United States 2006-2016," Economics Working Paper Series 1802, University of St. Gallen, School of Economics and Political Science.
    • Handle: RePEc:usg:econwp:2018:02
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    3. Amuedo-Dorantes, Catalina & Borra, Cristina, 2021. "The role of non-contributory pensions on internal mobility in Spain," Labour Economics, Elsevier, vol. 70(C).
    4. Vassil Kirov & Lucia Kováčová & Martin Guzi & Jan Czarzasty & Dragoș Adăscăliței & Martin Kahanec, 2023. "Preserving Jobs in COVID-19 Times in CEE Countries: Social Partners’ Responses and Actions," Discussion Papers 66, Central European Labour Studies Institute (CELSI).
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    6. Martin Kahanec & Martin Guzi, 2023. "Welfare Migration," Discussion Papers 65, Central European Labour Studies Institute (CELSI).
    7. Michael Kogler, 2023. "Taxes, risk taking, and financial stability," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 25(5), pages 1043-1068, October.
    8. Franziska Braschke & Patrick A. Puhani, 2023. "Population Adjustment to Asymmetric Labour Market Shocks in India: A Comparison to Europe and the United States at Two Different Regional Levels," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 66(1), pages 7-35, March.
    9. Berger, Johannes & Strohner, Ludwig, 2022. "Can labour mobility reduce imbalances in the euro area?," Research Papers 20, EcoAustria – Institute for Economic Research.
    10. Beck, Krzysztof & Yersh, Valeryia, 2024. "Economic integration and consumption risk sharing: A comparison of Eurozone and OECD countries," International Review of Economics & Finance, Elsevier, vol. 89(PB), pages 784-803.
    11. Zimmermann, Klaus F., 2018. "Reflections on wage-setting," GLO Discussion Paper Series 230, Global Labor Organization (GLO).
    12. Lauren Peritz & Ryan Weldzius & Ronald Rogowski & Thomas Flaherty, 2022. "Enduring the great recession: Economic integration in the European Union," The Review of International Organizations, Springer, vol. 17(1), pages 175-203, January.
    13. Vasco Curdia & Fernanda Nechio, 2024. "Would the Euro Area Benefit from Greater Labor Mobility?," Working Paper Series 2024-06, Federal Reserve Bank of San Francisco.
    14. Juan Carlos Martín & Alessandro Indelicato, 2022. "A DEA MCDM Approach Applied to ESS8 Dataset for Measuring Immigration and Refugees Citizens’ Openness," Journal of International Migration and Integration, Springer, vol. 23(4), pages 1941-1961, December.
    15. Sandra M. Leitner, 2022. "A skill‐specific dynamic labour supply and labour demand framework: A scenario analysis for the Western Balkan countries to 2030," LABOUR, CEIS, vol. 36(4), pages 471-504, December.
    16. Kohler, Wilhelm & Müller, Gernot J. & Wellmann, Susanne, 2023. "Risk sharing in currency unions: The migration channel," European Economic Review, Elsevier, vol. 158(C).
    17. Zimmermann, Klaus F., 2018. "Social Cohesion and Labor Mobility," GLO Discussion Paper Series 249, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Free mobility; migration; economic crisis; labour market adjustment; Eurozone; Europe; United States;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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