Immigration, Growth and Unemployment: Panel VAR Evidence from OECD Countries
Université d'Auvergne - Clermont 1 - Centre d'Etudes et de Recherches sur le Developpement International (CERDI)
Université Paris X Nanterre; Centre d'Etudes Prospectives et d'Info. Internationales (CEPII)
University of Orleans; Université d'Évry - Centre D'Etudes des Politiques Economiques et de L'Emploi (EPEE); Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA); Institute for the Study of Labor (IZA); CESifo (Center for Economic Studies and Ifo Institute)
IZA Discussion Paper No. 6966
This paper examines empirically the interaction between immigration and host country economic conditions. We employ panel VAR techniques to use a large annual dataset on 22 OECD countries over the period 1987-2009. The VAR approach allows to addresses the endogeneity problem by allowing the endogenous interaction between the variables in the system. Our results provide evidence of migration contribution to host economic prosperity (positive impact on GDP per capita and negative impact on aggregate unemployment, native- and foreign-born unemployment rates). We also find that migration is influenced by host economic conditions (migration responds positively to host GDP per capita and negatively to host total unemployment rate).
Number of Pages in PDF File: 30
Keywords: unemployment, growth, immigration, panel VAR
JEL Classification: E20, F22, J61
Date posted: November 3, 2012
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