Immigrants, Labor Market Dynamics and Adjustment to Shocks in the Euro Area

Gaetano Basso, Francesco D’Amuri () and Giovanni Peri
Additional contact information
Francesco D’Amuri: Bank of Italy
Authors registered in the RePEc Author Service: Francesco D'Amuri

IMF Economic Review, 2019, vol. 67, issue 3, No 5, 528-572

Abstract: Abstract We analyse the role of inter-regional labor mobility in absorbing labor demand shocks in the Euro Area (EA). We find that mobility of foreign-born workers is strongly cyclical, while this is not the case for natives. Foreigners’ higher population-to-employment elasticity reduces the variation of overall employment rates over the business cycle: because of them, the impact of a one standard deviation change in employment on employment rates is six percent lower at the country level and seven percent lower at the regional level. Additionally, we compare Euro Area mobility to that of another currency union, the United States. We find that the population-to-employment elasticity estimated for foreign-born individuals is similar in the EA and the United States, while EA natives are significantly less mobile across countries than US natives are across states in response to labor demand shocks. This last result confirms that in the Euro Area there is room for improving country-specific shock absorption through higher labor mobility. It also suggests that immigration helps labor market adjustments.

JEL-codes: F22 J61 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

Downloads: (external link)
http://link.springer.com/10.1057/s41308-019-00082-4 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Immigrants, labor market dynamics and adjustment to shocks in the Euro Area (2018)
Working Paper: Immigrants, Labor Market Dynamics and Adjustment to Shocks in the Euro Area (2018)
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: https://EconPapers.repec.org/RePEc:pal:imfecr:v:67:y:2019:i:3:d:10.1057_s41308-019-00082-4

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41308/PS2

DOI: 10.1057/s41308-019-00082-4

Access Statistics for this article

More articles in IMF Economic Review from Palgrave Macmillan, International Monetary Fund
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().