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Migration, trade and unemployment

Benedikt Heid () and Mario Larch ()

Economics - The Open-Access, Open-Assessment E-Journal, 2012, vol. 6, No 2012-4, 40 pages

Abstract: A source of anxiety of policy makers and the public in general is the detrimental impact of trade and immigration on unemployment. The transitory restrictions for worker migration after the EU enlargements of 2004 and 2007 exemplify the supposed negative effect of immigration on labor markets. This paper aims to identify the effects of immigration alongside trade on unemployment controlling for the high correlation between immigration and goods flows in order to prevent an omitted variable bias. The authors use data from 24 OECD countries over the period from 1997 to 2007 and employ instrumental variables fixed effects and dynamic panel estimators in order to account for unobserved heterogeneity as well as the potential endogeneity of migration flows and the high persistence of unemployment. We find no significant effect of immigration on unemployment on average.

Keywords: migration; unemployment; international trade; fixed effects instrumental variable panel estimators; dynamic panel estimators (search for similar items in EconPapers)
JEL-codes: C23 C26 F15 F16 F22 (search for similar items in EconPapers)
Date: 2012
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http://dx.doi.org/10.5018/economics-ejournal.ja.2012-4
https://www.econstor.eu/bitstream/10419/55855/1/68815185X.pdf (application/pdf)

Related works:
Working Paper: Migration, Trade and Unemployment (2011) Downloads
Working Paper: Migration, trade and unemployment (2011) Downloads
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