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How do rigid labor markets absorb immigration? Evidence from France

Anthony Edo ()

IZA Journal of Migration and Development, 2016, vol. 5, issue 1, 1-20

Abstract: Abstract This paper investigates how immigration can affect the labor market outcomes of native workers when their wages are rigid. I use a rich dataset for France and decompose the native workers according to whether they are covered by fixed-term or indefinite-term contracts. Indefinite-term contracts are associated with higher wage protection than fixed-term contracts that allow firms to adjust wages as contracts expire. I use an empirical methodology which captures the direct effects of an immigrant-induced increase in labor supply on the labor market outcomes of natives who have similar skills. I find that the monthly wage of native workers covered by fixed-term contracts decreases in response to immigration, while employment is the margin through which native workers on indefinite-term contracts is affected.

Keywords: F22; J23; J41; Immigration; Wage; Employment; Job contract (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1186/s40176-016-0055-1

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IZA Journal of Migration and Development is currently edited by Amelie F. Constant, Denis Fougère and Tommaso Colussi

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