THE INFLUENCE OF MIGRATIONS ON THE EURPEAN LABOUR MARKET

Marija Penava ()
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Marija Penava: Faculty of Economics and Business Zagreb

Economic Thought and Practice, 2011, vol. 20, issue 2, 335-362

Abstract: The patterns in international migrants’ movement changed substantially in the last few decades. Europe has become the main destination for world migrants, thereby making the analysis of the impact of migration on labour markets in Europe a crucial issue in this field. However, taking into account both the trend of aging population and slow economic growth in Europe, the influx of immigrants appeared to have a slowing down effect on these trends. The paper investigates labour market effects of migration-related supply shocks on labour market. The main objective was to determine the effects of the increase in the number of immigrants on labour market outcomes, such as level and rates of employment and unemployment, labour force participation rates and annual earnings. The empirical analysis (cross-section analysis) was conducted on 32 European countries for the period from the year 1998 to 2008. The obtained results are not significant, which can be attributed to the heterogeneity of European labour markets. Therefore it is not possible to unambiguously interpret the impact of immigration on the labour market. In order to improve the model, a new variable that eliminates heterogeneity issue and allows comparison was introduced - the unit labour cost. The results of the amended model showed that the impact of immigrants on the competitiveness of European countries is weak and negative.

Keywords: international migrations; European labour market; unit labour costs (search for similar items in EconPapers)
JEL-codes: F22 J61 (search for similar items in EconPapers)
Date: 2011
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