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Immigration and the macroeconomy: some new empirical evidence

Francesco Furlanetto () and Orjan Robstad
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Orjan Robstad: Norges Bank

Review of Economic Dynamics, 2019, vol. 34, 1-19

Abstract: We propose a new SVAR identification scheme that enables us to disentangle immigration shocks from other macroeconomic shocks in a sign-restricted model estimated on Norwegian data over the period 1990Q1 - 2014Q2. Notably, immigration is an endogenous variable in the model and can respond to the state of the economy. We find that domestic labor supply shocks and immigration shocks are well identified and are the dominant drivers of immigration dynamics. An exogenous immigration shock lowers unemployment (even among native workers), has a small positive effect on prices and on public finances, no impact on house prices and household credit, and a negative effect on productivity driven by a large decline in capital intensity. (Copyright: Elsevier)

Keywords: Labor supply shocks; Immigration shaocks; Job-related immigration; Identification; SVAR (search for similar items in EconPapers)
JEL-codes: C11 C32 E32 (search for similar items in EconPapers)
Date: 2019
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Working Paper: Immigration and the macroeconomy: some new empirical evidence (2017) Downloads
Working Paper: Immigration and the macroeconomy: some new empirical evidence (2016) Downloads
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DOI: 10.1016/j.red.2019.02.006

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