Immigration, income and unemployment: an application of the bounds testing approach to cointegration

Mete Feridun

No 7928, Greenwich Papers in Political Economy from University of Greenwich, Greenwich Political Economy Research Centre

Abstract: This study aims at investigating the nature of the causal relationship between immigration and two macroeconomic indicators, GDP per capita and unemployment, in Sweden using autoregressive distributed lag (ARDL) bounds testing procedure and Granger-causality within vector error correction model (VECM) based on annual data spanning the period between 1980 and 2004. Results of the ARDL bounds test are supportive of the theory that the variables are in a long-run equilibrium level relationship. On the other hand, results of the Granger-causality tests support the existence of a long-run, bidirectional causality between immigration and GDP per capita. However, results do not support the hypothesis that immigration causes unemployment. On the contrary, evidence suggests that unemployment causes immigration.

Keywords: economics (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (9)

Published in The Journal of Developing Areas 1.41(2007): pp. 37-49

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Journal Article: Immigration, income and unemployment: an application of the bounds testing approach to cointegration (2007)
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