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Protective or Counter-Productive? Labour Market Institutions and the Effect of Immigration on (2003)
| Venue: | EU Natives,” Economic Journal |
| Citations: | 82 - 3 self |
BibTeX
@ARTICLE{Angrist03protectiveor,
author = {Joshua D. Angrist and Adriana D. Kugler},
title = {Protective or Counter-Productive? Labour Market Institutions and the Effect of Immigration on},
journal = {EU Natives,” Economic Journal},
year = {2003},
pages = {302--331}
}
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Abstract
Reduced labour market flexibility may protect some native workers from immigrant competi-tion but can increase negative effects on equilibrium employment. This motivates an analysis of immigration effects interacted with institutions. OLS estimates for European countries show small, mostly negative immigration effects while an IV strategy based on immigrants from former Yugoslavia generates larger though mostly insignificant negative estimates. Specifica-tions allowing interactions between immigration and measures of labour and product market rigidity are consistent with the view that reduced flexibility increases negative immigration effects. The estimates typically imply more native job losses in countries with restrictive insti-tutions, especially restricted product markets. The European immigration policy debate is fuelled by the fact that immigration now accounts for the bulk of population growth in the European Union (EU) (OECD, 1999a). Many observers also note that increased immigration is likely to be part of any strategy to keep European social security systems solvent. At the same time, the rise in immigration has been associated with high levels of anti-foreigner sentiment, and the view that immigrants take jobs from natives is wide-
Keyphrases
labour market institution iv strategy product market rigidity labour market flexibility equilibrium employment immigration effect european immigration policy debate former yugoslavia generates flexibility increase negative immigration effect many observer european social security system solvent increased immigration insignificant negative estimate restrictive insti-tutions population growth native job loss european country european union anti-foreigner sentiment high level negative effect immigrant competi-tion native worker negative immigration effect restricted product market
