Exposure to Transit Migration, Public Attitudes, and Entrepreneurship among the Native Population

55 Pages Posted: 19 Nov 2019

See all articles by Nicolas Ajzenman

Nicolas Ajzenman

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics; SciencesPo - Sciences Po - Department of Economics

Cevat Giray Aksoy

European Bank for Reconstruction and Development; King’s College London; IZA Institute of Labor Economics

Sergei Guriev

Sciences Po; Centre for Economic Policy Research (CEPR)

Date Written: November 18, 2019

Abstract

We study the impact of the recent migration crisis on entrepreneurship in transit countries using a unique locality-level panel from the 2010 and 2016 rounds of the Life in Transition Survey for 18 European countries. To capture the exogenous variation in exposure to transit migration, we construct an instrument that exploits the distance of each locality to the optimal routes that minimise travelling time between the main origin and destination countries. We find that the entrepreneurial activity of natives falls considerably in localities that are more exposed to mass migration, compared to those located further away. We rule out mechanisms related to the outmigration of the local population and changes in local labour market conditions. Instead, our analysis suggests that increases in risk aversion and perceived political instability, accompanied by a decrease in governmental trust are the main mechanisms explaining the fall in entrepreneurial activity. Consistent with these results, we also document an increase in the anti-migrant sentiment while attitudes towards other population groups remained unchanged.

Keywords: migrant routes, entrepreneurship, public attitudes, political instability

JEL Classification: F22, L26, D91, O15, O10

Suggested Citation

Ajzenman, Nicolás and Aksoy, Cevat Giray and Guriev, Sergei, Exposure to Transit Migration, Public Attitudes, and Entrepreneurship among the Native Population (November 18, 2019). EBRD Working Paper, Available at SSRN: https://ssrn.com/abstract=3489094 or http://dx.doi.org/10.2139/ssrn.3489094

Nicolás Ajzenman

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Rua Itapeva 474 s.1202
São Paulo, São Paulo 01332-000
Brazil

SciencesPo - Sciences Po - Department of Economics ( email )

28, rue des Saints-Pères
Paris, Paris 75007
France

Cevat Giray Aksoy (Contact Author)

European Bank for Reconstruction and Development ( email )

One Exchange Square
London EC2A 2JN
United Kingdom

King’s College London ( email )

Aldwych
London, WC2A 2AE
United Kingdom

IZA Institute of Labor Economics ( email )

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

Sergei Guriev

Sciences Po ( email )

27 rue Saint-Guillaume
Paris Cedex 07, 75337
France

HOME PAGE: http://econ.sciences-po.fr/staff/sergei-guriev

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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