Discussion Paper

No. 2011-45 | November 02, 2011
Migration, Trade and Unemployment

Abstract

A source of anxiety of policy makers and the public in general is the detrimental impact of globalization 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 taking into account the substitutability of worker and goods flows. We 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 a significant negative effect of immigration on unemployment on average.

Paper submitted to the special issue
Responding to the Labour Market Challenges of Globalisation

JEL Classification

C23 C26 F15 F16 F22

Cite As

Benedikt Heid and Mario Larch (2011). Migration, Trade and Unemployment. Economics Discussion Papers, No 2011-45, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2011-45

Assessment



Comments and Questions


Anonymous - Referee Report 1
December 12, 2011 - 10:12

see attached file


Benedikt Heid - Response to Referee Report 1
January 18, 2012 - 10:42

see attached file


Anonymous - Referee Report 2
December 12, 2011 - 10:13

see attached file


Benedikt Heid - Response to Referee Report 2
January 18, 2012 - 10:43

see attached file


Anonymous - Referee report 3
December 16, 2011 - 12:32

Please see the attached report.


Benedikt Heid - Response to Referee Report 3
January 18, 2012 - 10:44

see attached file