A Macroeconomic Experiment in Mass Immigration

Zvi Hercowitz () and Eran Yashiv ()

No 475, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper studies the effects of mass immigration from the former USSR to Israel in the 1990s on the employment of the native-born. The exogeneity and the size of this inflow make it a “natural experiment” of macroeconomic proportions. An open-economy macroeconomic model is used to analyze this experience, focusing on the differential entry of immigrants into the labor and goods markets and the ensuing dynamic implications for labor demand. The reduced form of the model – consisting of two equations for native employment and the relative price of domestic goods – is estimated, finding negative effects of immigration on native employment a year after arrival. The delay in the effect is attributed to a positive impact of immigration on the excess demand for goods and, thus, on the demand for labor earlier on.

Keywords: immigration; open economy; natives employment (search for similar items in EconPapers)
JEL-codes: E24 F16 J61 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2002-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: A Macroeconomic Experiment in Mass Immigration (2001)
Working Paper: A Macroeconomic Experiment in Mass Immigration (1999)
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