Does Immigration Affect the Phillips Curve? Some Evidence for Spain

Samuel Bentolila, Juan Dolado and Juan F Jimeno

No 3249, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The Phillips curve has flattened in Spain over 1995-2006: unemployment has fallen by 15 percentage points, with roughly constant inflation. This change has been more pronounced than elsewhere. We argue that this stems from the immigration boom in Spain over this period. We show that the New Keynesian Phillips curve is shifted by immigration if natives’ and immigrants’ labour supply or bargaining power differ. Estimation of the curve for Spain indicates that the fall in unemployment since 1995 would have led to an annual increase in inflation of 2.5 percentage points if it had not been largely offset by immigration.

Keywords: immigration; Phillips curve (search for similar items in EconPapers)
JEL-codes: E31 J64 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2007-12
New Economics Papers: this item is included in nep-cba, nep-eec, nep-mac and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published - published in: European Economic Review, 2008, 52 (8),1398–1423

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Related works:
Journal Article: Does immigration affect the Phillips curve? Some evidence for Spain (2008)
Working Paper: Does immigration affect the Phillips curve? Some evidence for Spain (2008)
Working Paper: Does Immigration Affect the Phillips Curve? Some Evidence for Spain (2007)
Working Paper: Does Immigration Affect the Phillips Curve? Some Evidence for Spain (2007)
Working Paper: Does Immigration Affect the Phillips Curve? Some Evidence for Spain (2007)
Working Paper: Does Immigration Affect the Phillips Curve? Some Evidence for Spain (2007)
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