Immigration, Growth, and Unemployment: Panel VAR Evidence from OECD Countries

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. www.econstor.eu This paper examines empirically the interaction between immigration and host country economic conditions. We employ panel VAR techniques to use a large annual dataset on 22 OECD countries over the period . The VAR approach allows to addresses the endogeneity problem by allowing the endogenous interaction between the variables in the system. Our results provide evidence of migration contribution to host economic prosperity (positive impact on GDP per capita and negative impact on aggregate unemployment, nativeand foreign-born unemployment rates). We also find that migration is influenced by host economic conditions (migration responds positively to host GDP per capita and negatively to host total unemployment rate). Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S

The impact of Syrian refugees on the labor market in neighboring countries: empirical evidence from Jordan

“…In other words, the restrictions are imposed only on the dynamic relationships between a pair of variables that could be hidden in the standard econometrics models. In our paper, the application of the VAR model is in line with the literature examining the impact of immigration on macroeconomic indicators and economic conditions in the host country (see, for example, the recent work of Boubtane et al, 2013aBoubtane et al, , 2013bDamette and Fromentine, 2013).…”

Revisiting the Link Between Stock Prices and Goods Prices in OECD Countries

“…There is still another possibility that I (1) variables are cointegrated neither linearly nor non‐linearly in which case one needs to estimate VAR in first differences of the variables (Boubtane et al ., ). However, if there are many of such cases, we can estimate a panel VAR (PVAR) instead.…”

Aid, trade and migration: How do bilateral flows interact?

“…Other explanatory variables are endogenous to either aid, migration or trade (e.g., Unemployment, Differences in unemployment, GDP (South), Governance, Imports, Donor trade openness and Recipient trade openness ). First, immigration flows may affect the rates of unemployment in OECD countries by directly increasing the labour supply (see, e.g., Boubtane, Coulibaly, and Rault () and Ortega and Peri ()). Second, GDP (South) can increase with foreign assistance (Dollar & Levin, ); in addition, the economic impact of migration has been widely documented (see Combes, Ebeke, Maurel, and Yogo ()).…”