Recession and Migration

A couple of studies on recession and migration.

D’Amuri and Peri write that:

“In this paper we analyze the impact of immigrants on the type and quantity of native jobs. We use data on 15 Western European countries during the 1996–2010 period. We find that immigrants, by taking manual-routine type of occupations pushed natives towards more “complex” (abstract and communication) jobs. This job upgrade was associated to a 0.7% increase in native wages for a doubling of the immigrants’ share. These results are robust to the use of an IV strategy based on past settlement of immigrants across European countries. The job upgrade slowed but did not come to a halt during the Great Recession. We also document the labor market flows behind it: the complexity of jobs offered to new native hires was higher relative to the complexity of lost jobs. Finally, we find evidence that such reallocation was larger in countries with more flexible labor laws.”

In this article, Professor Philip Martin writes that:

“Comparisons with past recessions suggest that the global nature of the 2008-09 recession could affect migrants differently than in the past for three major reasons. First, during this recession one region is not benefiting economically at the expense of another, so that migrants cannot shift to alternative destinations, as when high oil prices attracted migrants to the Gulf countries while doors to migrants closed to Western Europe.

“Second, the first effects of recession are being felt in cyclically sensitive industries such as construction and manufacturing, where last-hired and often male migrants may be among the first to be laid off. What is less certain is whether laid-off migrants will remain in destination countries or return to their countries of origin, as with jobless migrants in Spain, and whether female migrants in service jobs will be laid off or have their wages reduced.

“Third, there is far more interest in remittances and their contribution to development in migrant-sending countries than during previous recessions. Remittances are far higher than in the past, and are expected to remain high even as foreign direct investment and other flows of funds to developing countries slow (Ratha et al, 2008). The governments of migrant-sending countries may develop financial instruments to attract more remittances, such as offering migrant bonds with attractive returns, or use the specter of more unauthorized migration in a bid to preserve jobs for migrant workers or to request financial aid from industrial countries (Chamie, 2009). Many international organizations have urged countries employing migrants not to quickly shut their doors.

“Fourth, immigration is less likely to be affected significantly in the United States than in other traditional immigration countries because a higher share of US immigrants enter under family unification preferences (Papademetriou and Terrazas, 2009). Immigration to Australia, Canada, and New Zealand, on the other hand, may be more affected by the recession because half or more of the immigrants are admitted under economic criteria that give priority to those most likely to obtain jobs.”

This entry was posted in economy, global, labour market, migration, remittances, unemployment, wages. Bookmark the permalink.

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