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The Cyclicality of Immigrant Wages and Labour Market Flows: Evidence from Spain

Gálvez-Iniesta Ismael ()
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Gálvez-Iniesta Ismael: Department of Applied Economics, Universitat de les Illes Balears, Palma 07012, Spain

Economics - The Open-Access, Open-Assessment Journal, 2022, vol. 16, issue 1, 90-122

Abstract: This article studies the responses of real wages and labour market flows of immigrants in Spain for the period between 1999 and 2019. By using Labour Force Survey microdata, I examine the cyclicality of job-finding and job-separation rates for immigrants and natives over the long Spanish economic expansion and the sharp contraction. During the expansion, 1999–2007, the job-finding rate was higher for immigrants than for natives, but both rates converged to a lower level after the Great Recession took place in 2008. I also find that the impact of the crisis on the job-separation rate was more than three times as high for immigrants than for natives. By using longitudinal social security data, I find that wage cyclicality is higher for immigrants than for natives: a one percentage point increase in the unemployment rate is associated with a 0.61 and 0.85% drop in real wages for natives and immigrants, respectively. However, these differences only occur among low-tenure workers. This study provides novel empirical evidence to enrich macroeconomic theories on the interaction of economic cycles and the impact of immigration.

Keywords: immigration; labour market; job-finding rate; job-separation rate; wage cyclicality (search for similar items in EconPapers)
JEL-codes: E24 J21 J31 J60 J61 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1515/econ-2022-0020

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Handle: RePEc:bpj:econoa:v:16:y:2022:i:1:p:90-122:n:9