Immigrants, Labor Market Dynamics and Adjustment to Shocks in the Euro Area / Gaetano Basso, Francesco D'Amuri, Giovanni Peri.

Format:

Book

Author/Creator:

Basso, Gaetano.

Contributor:

D'Amuri, Francesco.

Peri, Giovanni.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w25091.

NBER working paper series no. w25091

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2018.

Summary:

We analyze the role of labor mobility in cushioning labor demand shocks in the Euro Area. We find that foreign born workers' mobility is strongly cyclical, while this is not the case for natives. Foreigners' higher population to employment elasticity reduces the variation of overall employment rates over the business cycle: thanks to them, the impact of a one standard deviation change in employment on employment rates decreases by 6 per cent at the country level and by 7 per cent at the regional level. Additionally, we compare Euro Area mobility to that of another currency union, the US. We find that the population to employment elasticity estimated for foreign-born persons is similar in the Euro Area and the US, while EA natives are definitely less mobile across countries than US natives are across states in response to labor demand shocks. This last result confirms that in the Euro Area there is room for improving country specific shocks absorption through higher labor mobility. It also suggests that immigration helped labor market adjustments.

Notes:

September 2018.

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