EconPapers    
Economics at your fingertips  
 

How Immigrants Helped EU Labor Markets to Adjust during the Great Recession

Martin Kahanec () and Martin Guzi ()
Additional contact information
Martin Kahanec: Central European University

No 10443, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: The 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. 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.

Keywords: immigrant worker; labor supply; skilled migration; labor shortage; wage regression; Great Recession (search for similar items in EconPapers)
JEL-codes: J24 J61 J68 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-eur, nep-int, nep-mig and nep-ure
Date: 2016-12
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://ftp.iza.org/dp10443.pdf (application/pdf)

Related works:
Working Paper: How Immigrants Helped EU Labor Markets to Adjust during the Great Recession (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:iza:izadps:dp10443

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute for the Study of Labor (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Series data maintained by Mark Fallak ().

 
Page updated 2017-03-26
Handle: RePEc:iza:izadps:dp10443