Abstract

https://ssrn.com/abstract=2901424
 


 



Immigration and the Macroeconomy: Some New Empirical Evidence


Francesco Furlanetto


Norges Bank

Ørjan Robstad


Norges Bank

November 24, 2016

Norges Bank Working Paper 18/2016

Abstract:     
We propose a new VAR identification scheme that enables us to disentangle immigration shocks from other macroeconomic shocks. Identification is achieved by imposing sign restrictions on Norwegian data over the period 1990Q1-2014Q2. The availability of a quarterly series for net immigration is crucial to achieving identification. Notably, immigration is an endogenous variable in the model and can respond to the state of the economy. We find that domestic labor supply shocks and immigration shocks are well identified and are the dominant drivers of immigration dynamics. An exogenous immigration shock lowers unemployment (even among native workers), has a positive effect on prices and on public finances in the medium run, no impact on house prices and household credit, and a negative effect on productivity.

Number of Pages in PDF File: 42

Keywords: labor supply shocks, immigration shocks, job-related immigration, identification, VAR

JEL Classification: C11, C32, E32


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Date posted: January 19, 2017  

Suggested Citation

Furlanetto, Francesco and Robstad, Ørjan, Immigration and the Macroeconomy: Some New Empirical Evidence (November 24, 2016). Norges Bank Working Paper 18/2016. Available at SSRN: https://ssrn.com/abstract=2901424 or http://dx.doi.org/10.2139/ssrn.2901424

Contact Information

Francesco Furlanetto (Contact Author)
Norges Bank ( email )
P.O. Box 1179
Oslo, N-0107
Norway

Ørjan Robstad
Norges Bank ( email )
P.O. Box 1179
Oslo, N-0107
Norway

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