Migration as an Adjustment Mechanism in the Crisis? A Comparison of Europe and the United States 2006–2016

28 Pages Posted: 25 Feb 2018

See all articles by Julia Jauer

Julia Jauer

Organization for Economic Co-Operation and Development (OECD)

Thomas Liebig

Organization for Economic Co-Operation and Development (OECD)

John P. Martin

Organization for Economic Co-Operation and Development (OECD) - Directorate for Employment, Labour and Social Affairs (ELS); IZA Institute of Labor Economics; Sciences Po

Patrick A. Puhani

Leibniz Universität Hannover; University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research; IZA Institute of Labor Economics; Université Paris II - Panthéon-Assas

Abstract

We estimate whether migration can be an equilibrating force in the labour market by comparing pre- and post-crisis migration movements at the regional level in both Europe and the United States, and their association with asymmetric labour market shocks. Based on fixed-effects regressions using regional panel data, we find that Europe's migratory response to unemployment shocks was almost identical to that recorded in the United States after the crisis. Our estimates suggest that, if all measured population changes in Europe were due to migration for employment purposes – i.e. an upper-bound estimate – up to about a quarter of the asymmetric labour market shock would be absorbed by migration within a year. However, in Europe and especially in the Eurozone, the reaction to a very large extent stems from migration of recent EU accession country citizens as well as of third-country nationals.

Keywords: free mobility, migration, economic crisis, labour market adjustment, Eurozone, Europe, United States

JEL Classification: F15, F22, J61

Suggested Citation

Jauer, Julia and Liebig, Thomas and Martin, John P. and Puhani, Patrick A., Migration as an Adjustment Mechanism in the Crisis? A Comparison of Europe and the United States 2006–2016. IZA Discussion Paper No. 11328. Available at SSRN: https://ssrn.com/abstract=3129272

Julia Jauer (Contact Author)

Organization for Economic Co-Operation and Development (OECD)

2 rue Andre Pascal
Paris Cedex 16, 75775
France

Thomas Liebig

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

John P. Martin

Organization for Economic Co-Operation and Development (OECD) - Directorate for Employment, Labour and Social Affairs (ELS) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

IZA Institute of Labor Economics

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

Sciences Po ( email )

rue saint guillaume
Paris
France

Patrick A. Puhani

Leibniz Universität Hannover ( email )

Institut für Arbeitsökonomik
Koenigsworther Platz 1
30167 Hannover, DE 30167
Germany

University of St. Gallen - Swiss Institute for International Economics and Applied Economic Research ( email )

Dufourstr. 48
St. Gallen, 9000
Switzerland
+41 71 224 2341 (Phone)
+41 71 224 2298 (Fax)

IZA Institute of Labor Economics

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

Université Paris II - Panthéon-Assas

12 place du Pantheon
Paris cedex 06, 75231
France

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