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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 fixed-effects 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," GLO Discussion Paper Series 178, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:178
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    Cited by:

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    2. Berger, Johannes & Strohner, Ludwig, 2022. "Can labour mobility reduce imbalances in the euro area?," Research Papers 20, EcoAustria – Institute for Economic Research.
    3. Zimmermann, Klaus F., 2018. "Reflections on wage-setting," GLO Discussion Paper Series 230, Global Labor Organization (GLO).
    4. 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.
    5. Wilhelm Kohler & Gernot Müller & Susanne Wellmann, 2021. "Risk Sharing in Currency Unions: The Migration Channel," CESifo Working Paper Series 8982, CESifo.
    6. Amuedo-Dorantes, Catalina & Borra, Cristina, 2021. "The role of non-contributory pensions on internal mobility in Spain," Labour Economics, Elsevier, vol. 70(C).
    7. Kogler, Michael, 2022. "Taxes, Risk Taking, and Financial Stability," Economics Working Paper Series 2202, University of St. Gallen, School of Economics and Political Science.
    8. 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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