How immigrants helped EU labor markets to adjust during the Great Recession

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Martin GuziMasaryk University, IZA and CELSI This version: October, 2016 AbstractThe economic literature starting with Borjas (2001) suggests that immigrants are more flexible than natives in responding to changing sectoral, occupational, and spatial shortages in the labor market. In this paper, we study the relative responsiveness to labor shortages by immigrants from various origins, skills and tenure in the country vis-à-vis the natives, and how it varied over the business cycle during the Great Recession. We show that immigrants in general have responded to changing labor shortages across EU member states, occupations and sectors more fluidly than natives. This effect is especially significant for low-skilled immigrants from the new member states or with the medium number of years since immigration, as well as with high-skilled immigrants with relatively few (1-5) or many (11+) years since migration. The relative responsiveness of some immigrant groups declined during the crisis years (those from Europe outside the EU or with eleven or more years since migration), whereas other groups of immigrants became particularly fluid during the Great Recession, such as those from new member states. Our results suggest immigrants may play an important role in labor adjustment during times of asymmetric economic shocks, and support the case for well-designed immigration policy and free movement of workers within the EU. The paper provides new insights into the functioning of the European Single Market and the roles various immigrant groups play for its stabilization through labor adjustment during times of uneven economic development across sectors, occupations, and countries.JEL codes: J24, J61, J68

Self-employment convergence in Europe: The role of migration

“…The relevance of this finding is that it suggests that being self-employed in a foreign country leads to shared patterns across countries that outweigh other specific aspects, such as individuals' own culture or the characteristics of the host country. This interpretation is consistent with empirical research that has proven that self-employed migrants are (for all countries of origin and residence) more responsive to changes in labour markets scenarios than their native counterparts are [38].…”

Job separation rates of immigrants and natives in the UK during the Great Recession

“…They also concluded that many immigrants returned to their country of origin or moved on to other destinations during the downturn, and that Ireland gained from this behaviour, as it was able to take advantage of labour during the boom, and shed it at little cost when the recession hit. Kahanec and Guzi (2017) also found that migrants (and in particular low-skilled migrants) from the new EU member states (entry in 2004 and 2007) were more responsive to the labour market needs of the host countries, reinforcing previous findings. This, along with the rest of the preceding discussion, suggests that the crisis may increase exits to unemployment differently for individuals with systematically different observable and unobservable characteristics, but it can also induce migrants to leave the UK, and thus also determine the observed average outcome for the group in question.…”

How Immigration Grease Is Affected by Economic, Institutional, and Policy Contexts: Evidence from EU Labor Markets

“…Due to the relatively low numbers of immigrants residing in the EU member states that joined the EU in 2004, 2007 and 2013 (Kahanec and Zaiceva, ), we limit our sample to the EU15 countries. Our empirical strategy expands on that used by Borjas (), Dustmann et al (), and Kahanec and Guzi (), which we amend to study how immigrants, relative to natives, respond to skill shortages under different economic, institutional and policy contexts. In particular we test how immigrants’ responsiveness to skill shortages, vis‐à‐vis the natives, differs with respect to GDP level, unemployment rate, the generosity of welfare spending, immigrant integration programs, the restrictiveness of migration policies, migration rate, the scale of non‐EU immigration and welfare state type.…”