THE IMPACT OF IMMIGRATION ON UNEMPLOYMENT AND ECONOMIC GROWTH IN KENYA

Charles Maingi Mulatia

Working Papers from African Economic Research Consortium

Abstract: This paper employs the annual time series data spanning 1980 to 2010 to analyze the impact of immigration on unemployment and economic growth in Kenya. This is followed by the recent attacks from the Somali's insurgent group; al shabaab. The militias' invasion of Kenya's territory coupled with the fear that immigrants rob natives their jobs has raised eye brows among Kenyans. This paper seeks to allay such fears and dig on the real impact of immigrants on Kenya's economic performance via the product and hence the labour market. In the analysis, the study makes use of instrumental variable (IV), a special case of GMM, due to the problem of data limitation and endogeneity amongst the variables. The results indicate that on obtainable evidence, fear of large gloomy employment and economic growth are not justified. The perception that immigrants steal jobs away from existing population, thus contributing to large increases in unemployment do not find verification in the analysis of data.

Date: 2012-02-20
Note: African Economic Research Consortium
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