How Immigration Grease is Affected by Economic, Institutional and Policy Contexts: Evidence from EU Labor Markets

Pre-print, article published in Kyklos, Vol. 71, Issue 2, pp. 213-243, 2018

29 Pages Posted: 11 Jan 2017 Last revised: 20 May 2018

Martin Guzi

Masaryk University; Central European Labour Studies Institute (CELSI); IZA Institute of Labor Economics

Martin Kahanec

IZA Institute of Labor Economics; Central European University; Central European Labour Studies Institute

Lucia Mytna Kurekova

Slovak Governance Institute; Central European University

Date Written: October 24, 2017

Abstract

Theoretical arguments and previous country-level evidence indicate that immigrants are more fluid than natives in responding to changing skill shortages across countries, occupation-groups or industries. The diversity across EU member states enables us to test this hypothesis across various institutional, economic and policy contexts. Drawing on the EU LFS and EU SILC datasets we study the relationship between residual wage premia as a measure of skill shortages in different occupation-industry-country cells and the shares of immigrants and natives working in these cells. We find that immigrants’ responsiveness to skill shortages exceeds that of natives in the EU15, in particular in member states with low GDP, higher levels of immigration from outside EU, and more open immigration and integration policies; but also those with barriers to citizenship acquisition or family reunification. Whereas higher welfare spending seems to exert a lock-in effect, a comparison across different types of welfare states indicates that institutional complementarities alleviate such effect.

Keywords: labor supply, skill matching, migration, skill shortage, welfare state, institutions, policy, integration.

JEL Classification: J15, J24, J61, J68

Suggested Citation

Guzi, Martin and Kahanec, Martin and Mytna Kurekova, Lucia, How Immigration Grease is Affected by Economic, Institutional and Policy Contexts: Evidence from EU Labor Markets (October 24, 2017). Pre-print, article published in Kyklos, Vol. 71, Issue 2, pp. 213-243, 2018. Available at SSRN: https://ssrn.com/abstract=2897379

Martin Guzi (Contact Author)

Masaryk University ( email )

Lipova 41a
Brno, 60200
Czech Republic
+420549496766 (Phone)

HOME PAGE: http://www.muni.cz/econ/people/233611

Central European Labour Studies Institute (CELSI)

Zvolenská 29
Bratislava, 82109
Slovakia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://legacy.iza.org/en/webcontent/personnel/photos/index_html?key=5347

Martin Kahanec

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Central European University ( email )

Nador utca 9
Budapest, H-1051
Hungary

Central European Labour Studies Institute ( email )

Zvolenská 29
Bratislava, 82109
Slovakia

HOME PAGE: http://www.celsi.sk

Lucia Mytna Kurekova

Slovak Governance Institute ( email )

Gajova 4
Bratislava, 81109
Slovakia

Central European University ( email )

Nador utca 9
Budapest, H-1051
Hungary

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