OECD Economics Department Working Papers
Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
The Unemployment Impact of Immigration in OECD Countries
This paper assesses the consequences of immigration for natives' unemployment in OECD countries and
investigates the role played by product and labour market policies in the economy's adjustment to
immigration inflows. The estimations, combining a skill-level and an aggregate approach using data for
males, cover eighteen OECD countries over the period 1984-2003. While no significant long-run impact is
found, an increase in the share of immigrants in the labour force is estimated to raise temporarily natives'
unemployment, over a period of approximately five to ten years. Anticompetitive product market
regulations are found to increase both the magnitude and the persistence of this impact, while more
stringent employment protection legislation magnifies its persistence, and a higher average replacement
rate of unemployment benefits increases its magnitude.
Keywords: labour market policies, immigration, product market regulation, unemployment
JEL:
E24: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity;
J61: Labor and Demographic Economics / Mobility, Unemployment, Vacancies, and Immigrant Workers / Geographic Labor Mobility; Immigrant Workers;
L43: Industrial Organization / Antitrust Issues and Policies / Legal Monopolies and Regulation or Deregulation
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