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Migration, Trade and UnemploymentBenedikt HeidIfo Institute for Economic Research - International Trade; University of Bayreuth - Chair of Empirical Economics Mario LarchUniversity of Bayreuth; CESifo; Ifo Institute for Economic Research; GEP at the University of Nottingham 2011 Economics Discussion Paper No. 2011-45 Abstract: A source of anxiety of policy makers and the public in general is the detrimental impact of globalization and immigration on unemployment. The transitory restrictions for worker migration after the EU enlargements of 2004 and 2007 exemplify the supposed negative effect of immigration on labor markets. This paper aims to identify the effects of immigration alongside trade on unemployment taking into account the substitutability of worker and goods flows. We use data from 24 OECD countries over the period from 1997 to 2007 and employ instrumental variables fixed effects and dynamic panel estimators in order to account for unobserved heterogeneity as well as the potential endogeneity of migration flows and the high persistence of unemployment. We find a significant negative effect of immigration on unemployment on average.
Number of Pages in PDF File: 37 Keywords: migration, unemployment, international trade, fixed effects instrumental variable panel estimators, dynamic panel estimators JEL Classification: C23, C26, F15, F16, F22 working papers seriesDate posted: December 18, 2011Suggested Citation |
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