Do Immigrants Take or Create Residents’ Jobs? Quasi-Experimental Evidence from Switzerland

KOF Working Papers No. 335

63 Pages Posted: 14 Jun 2013

See all articles by Christoph Basten

Christoph Basten

University of Zurich; Swiss Finance Institute; CESifo (Center for Economic Studies and Ifo Institute)

Michael Siegenthaler

ETH Zürich - KOF Swiss Economic Institute

Date Written: May 2013

Abstract

We estimate the causal effect of immigration on the labor market outcomes of resident employees in Switzerland, whose foreign labor force has increased by 32.8% in the last decade. To address endogeneity of immigration into different labor market cells, we develop new variants of the shift-share instrument, tailored for small-open economies, that exploit only that part in the variation of immigration which can be explained by migration push-factors in the source countries. We find that immigration has reduced unemployment of residents and has enabled them to fill more demanding jobs, while it had no adverse effect on wages and employment.

Keywords: Immigration, native employment, labor shortage, shift-share instrument

JEL Classification: F22, J21, J61

Suggested Citation

Basten, Christoph and Siegenthaler, Michael, Do Immigrants Take or Create Residents’ Jobs? Quasi-Experimental Evidence from Switzerland (May 2013). KOF Working Papers No. 335, Available at SSRN: https://ssrn.com/abstract=2275185 or http://dx.doi.org/10.2139/ssrn.2275185

Christoph Basten

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Swiss Finance Institute

c/o University of Geneva
40 Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Michael Siegenthaler (Contact Author)

ETH Zürich - KOF Swiss Economic Institute ( email )

Zurich
Switzerland

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