Economics at your fingertips  

On the potential interaction between labour market institutions and immigration policies

Claudia Cigagna and Giovanni Sulis ()

International Journal of Manpower, 2015, vol. 36, issue 4, 441-468

Abstract: Purpose - – The purpose of this paper is to analyse the effect of unemployment and labour institutions such as employment protection legislation, coverage of unemployment benefits, minimum wages (MW), union power and tax wedge on migration flows. The authors allow for interactions of these institutions with migration entry laws, as both affect equilibrium wages and employment in destination countries, influencing mobility decisions of immigrants. Design/methodology/approach - – The authors use data on migration flows for a sample of 15 OECD countries over the period 1980-2006. The relationship between flows and labour institutions is analysed using OLS techniques and including destination and origin-by-year fixed effects. The coefficients of interest are identified through within country variation. The authors test the robustness of the results to different specifications using, among others, dynamic models for panel data. Findings - – The authors find strong and negative effects of unemployment, employment protection and migration policy on flows. The negative effect of migration policy on flows is larger in countries with high than in countries with low employment protection. The authors find positive effects for MW, unemployment benefits and union power. The authors show heterogeneous effects depending on the group of countries of origin and destination. Research limitations/implications - – While the identification strategy allows us to estimate the effects of interest, the baseline estimates may suffer from endogeneity problems in terms of omitted variable bias and reverse causality. The sensitivity checks provide mixed results and show that baseline estimates are not always robust to different specifications. Further work is needed to better address the problem of endogeneity. Originality/value - – The paper adds to the previous literature on the determinants of immigration flows by explicitly considering the labour market environment in destination countries. The results provide insights into potential interaction effects and coordination of reforms in labour markets and immigration policies.

Keywords: Determinants; Welfare; Immigration; Unemployment; Legislation; Employment protection; Collective bargaining; J61; J50; F22 (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link) ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
Working Paper: On the Potential Interaction Between Labour Market Institutions and Immigration Policies (2015) Downloads
Working Paper: On the potential interaction between labour market institutions and immigration policies (2013) 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:

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK

Access Statistics for this article

International Journal of Manpower is currently edited by Adrian Ziderman

More articles in International Journal of Manpower from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

Page updated 2021-05-11
Handle: RePEc:eme:ijmpps:v:36:y:2015:i:4:p:441-468