Exposure to Transit Migration, Public Attitudes and Entrepreneurship

57 Pages Posted: 13 Apr 2020

See all articles by Nicolas Ajzenman

Nicolas Ajzenman

Getulio Vargas Foundation (FGV) - Sao Paulo School 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)

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Abstract

Does exposure to mass migration affect economic behavior, attitudes and beliefs of natives in transit countries? In order to answer this question, we use a unique locality-level panel from the 2010 and 2016 rounds of the Life in Transition Survey and data on the main land routes taken by migrants in 18 European countries during the refugee crisis in 2015. To capture the exogenous variation in natives' exposure to transit migration, we construct an instrument that is based on the distance of each locality to the optimal routes that minimize travelling time between the main origin and destination cities. We first show that the entrepreneurial activity of natives falls considerably in localities that are more exposed to mass transit migration, compared to those located further away. We then explore the mechanisms and find that our results are likely to be explained by a decrease in the willingness to take risks as well as in the confidence in institutions. We also document an increase in the anti-migrant sentiment while attitudes towards other minorities remained unchanged. We rule out the possibility of out-migration of natives or of trade-related shocks (potentially confounded with the mass-transit migration) affecting our results. Using locality-level luminosity data, we also rule out any effect driven by changes in economic activity. Finally, we find no statistically significant effects on other labor market outcomes, such as unemployment or labor force participation.

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

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

Suggested Citation

Ajzenman, Nicolas and Aksoy, Cevat Giray and Guriev, Sergei, Exposure to Transit Migration, Public Attitudes and Entrepreneurship. IZA Discussion Paper No. 13130, Available at SSRN: https://ssrn.com/abstract=3573300

Nicolas Ajzenman (Contact Author)

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

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

Cevat Giray Aksoy

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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