Hostname: page-component-586b7cd67f-gb8f7 Total loading time: 0 Render date: 2024-11-24T00:39:29.934Z Has data issue: false hasContentIssue false
  • English
  • Français

IMMIGRATION AND UNEMPLOYMENT: A MACROECONOMIC APPROACH

Published online by Cambridge University Press:  02 October 2017

Takehiro Kiguchi  and
Andrew Mountford
Takehiro Kiguchi
Affiliation:
Waseda University
Andrew Mountford*
Affiliation:
Royal Holloway, University of London
*
Address correspondence to: Andrew Mountford, Department of Economics, Royal Holloway, University of London, Egham, Surrey TW20 OEX, UK; e-mail: [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper analyzes the effects of an unanticipated increase in immigration in a macroeconomic model with search and matching frictions. It shows how an immigration shock can lead to a temporary increase in unemployment under a variety of conditions and that this is qualitatively consistent with the responses from a VAR estimated on postwar US data.

Keywords

MacroeconomicsImmigrationUnemployment
Type
Articles
Information
Macroeconomic Dynamics , Volume 23 , Issue 4 , June 2019 , pp. 1313 - 1339
Copyright
Copyright © Cambridge University Press 2017 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

We thank the participants of the seminar at the Department of Economics Management and Statistics Università degli Studi di Milano-Bicocca, Italy and Royal Holloway University for their useful comments. T. Kiguchi gratefully acknowledges the financial support by Waseda University Grant for Special Research Projects (2015S-188). All errors are our own.

References

REFERENCES

Andolfatto, D. (1996) Business cycles and labor-market search. American Economic Review 86 (1), 112–132.Google Scholar
Battisti, M., Felbermayr, G., Peri, G., and Poutvaara, P. (2014) Immigration, Search, and Redistribution: A Quantitative Assessment of Native Welfare. NBER working papers 20131.Google Scholar
Ben-Gad, M. (2004) The economic effects of immigration – A dynamic analysis. Journal of Economic Dynamics and Control 28 (9), 1825–1845.Google Scholar
Ben-Gad, M. (2008) Capital-skill complementarity and the immigration surplus. Review of Economic Dynamics 11 (2), 335–365.Google Scholar
Blanchard, O. and Galí, J. (2010) Labor markets and monetary policy: A new Keynesian model with unemployment. American Economic Journal: Macroeconomics 2 (2), 1–30.Google Scholar
Bokan, N., Hallett, A. Hughes, and Jensen, S. E. Hougaard (2016) Growth-maximizing public debt under changing demographics. Macroeconomic Dynamics 20 (6), 1640–1651.Google Scholar
Brezis, E. S. and Ferreira, R. D. S. (2016) Endogenous fertility with a sibship size effect. Macroeconomic Dynamics 20 (8), 2046–2066.Google Scholar
Brückner, M. and Pappa, E. (2012) Fiscal expansions, unemployment and labor force participation. International Economic Review 53 (4), 1205–1228.Google Scholar
Caldara, D., Fuentes-Albero, C., Gilchrist, S., and E. Zakrajek (2016) The macroeconomic impact of financial and uncertainty shocks. European Economic Review 88, 185–207.Google Scholar
Canova, F. and Ravn, M. O. (2000) The macroeconomic effects of German unification: Real adjustments and the welfare state. Review of Economic Dynamics 3 (3), 423–460.Google Scholar
Card, D. and Peri, G. (2016) Immigration Economics by George J. Borjas: A review essay. Journal of Economic Literature 54 (4), 1333–1349.Google Scholar
Chassamboulli, A. and Palivos, T. (2013) The impact of immigration on the employment and wages of native workers. Journal of Macroeconomics 38, 19–34.Google Scholar
Chassamboulli, A. and Palivos, T. (2014) A search equilibrium approach to the effects of immigration on labor market outcomes. International Economic Review 55 (1), 111–129.Google Scholar
Chassamboulli, A. and Peri, G. (2015) The labor market effects of reducing the number of illegal immigrants. Review of Economic Dynamics 18 (4), 792–821.Google Scholar
Christiano, L., Eichenbaum, M., and Evans, C. (2005) Nominal rigidities and the dynamic effects of a shock to monetary policy. Journal of Political Economy 113 (1), 1–45.Google Scholar
Cociuba, S., Prescott, E., and Ueberfeldt, A. (2012) U.S. Hours and Productivity Behavior Using CPS Hours Worked Data: 1947-III to 2009-III. Unpublished paper, University of Western Ontario.Google Scholar
Diamond, P. (1982) Wage determination and efficiency in search equilibrium. Review of Economic Studies 49 (2), 217–227.Google Scholar
Doepke, M., Hazan, M., and Maoz, Y. (2015) The baby boom and World War II: A macroeconomic analysis. Review of Economic Studies 82 (3), 1031–1073.Google Scholar
Galí, J. (2008) Monetary Policy, Inflation, and the Business Cycle. Princeton, NJ: Princeton University Press.Google Scholar
Hall, R. (2005) Employment fluctuations with equilibrium wage stickiness. American Economic Review 95 (1), 50–65.Google Scholar
Hanson, G. H. and McIntosh, C. (2010) The Great Mexican emigration. Review of Economics and Statistics 92 (4), 798–810.Google Scholar
Hanson, G. H. and McIntosh, C. (2012) Birth rates and border crossings: Latin American migration to the US, Canada, Spain and the UK. Economic Journal 122 (561), 707–726.Google Scholar
Hatton, J. T. (2015) American immigration policy: The 1965 act and its consequences. Scandinavian Journal of Economics 117 (2), 347–368.Google Scholar
Hauser, D. (2014) Technology Shocks, Labour Mobility and Aggregate Fluctuations. Bank of Canada working paper 2014-4.Google Scholar
Hazari, B. R. and Sgro, P. M. (2003) The simple analytics of optimal growth with illegal migrants. Journal of Economic Dynamics and Control 28 (1), 141–151.Google Scholar
Kiguchi, T. (2015) Essays on Macroeconomics of Immigration. Ph.D. Dissertation, Royal Holloway, University of London.Google Scholar
Khraiche, M. (2015) A macroeconomic analysis of guest worker permits. Macroeconomic Dynamics 19 (1), 189–220.Google Scholar
Liu, X. (2010) On the macroeconomic and welfare effects of illegal immigration. Journal of Economic Dynamics and Control 34 (12), 2547–2567.Google Scholar
Manacorda, M., Manning, A., and Wadsworth, J. (2012) The impact of immigration on the structure of wages: Theory and evidence from Britain. Journal of the European Economic Association 10 (1), 120–151.Google Scholar
Merz, M. (1995) Search in the labor market and the real business cycle. Journal of Monetary Economics 36 (2), 269–300.Google Scholar
Mortensen, D. and Pissarides, C. (1994) Job creation and job destruction in the theory of unemployment. Review of Economic Studies 61 (3), 397–415.Google Scholar
Mountford, A. (2004) Global analysis of an overlapping generations economy with land. Macroeconomic Dynamics 8 (5), 582–595.Google Scholar
Mountford, A. and Uhlig, H. (2009) What are the effects of fiscal policy shocks? Journal of Applied Econometrics 24 (6), 960–992.Google Scholar
Moy, H. M. and Yip, C. K. (2006) The simple analytics of optimal growth with illegal migrants: A clarification. Journal of Economic Dynamics and Control 30 (12), 2469–2475.Google Scholar
Palivos, T. (2009) Welfare effects of illegal immigration. Journal of Population Economics 22 (1), 131–144.Google Scholar
Palivos, T. and Yip, C. K. (2010) Illegal immigration in a heterogeneous labor market. Journal of Economics 101 (1), 21–47.Google Scholar
Ramey, V. (2011) Identifying government spending shocks: It's all in the timing. Quarterly Journal of Economics 126 (1), 1–50.Google Scholar
Ravn, M. O. (2008) The consumption-tightness puzzle. In Reichlin, L. and West, K. (eds.), NBER International Seminar on Macroeconomics 2006, pp. 9–63. Chicago, IL: University of Chicago Press.Google Scholar
Sasaki, H. and Hoshida, K. (2016) The effects of negative population growth: An analysis using a semiendogenous R&D growth model. Macroeconomic Dynamics, 1–16. Available from https://www.cambridge.org/core/journals/macroeconomic-dynamics/article/the-effects-of-negative-population-growth-an-analysis-using-a-semiendogenous-randd-growth-model/1EEC283D7719BC0EC59405DBC599985A.Google Scholar
Shimer, R. (2010) Labor Markets and Business Cycles. Princeton, NJ: Princeton University Press.Google Scholar
Silva, J. I. and Toledo, M. (2009) Labor turnover costs and the cyclical behavior of vacancies and unemployment. Macroeconomic Dynamics 13 (S1), 76–96.Google Scholar
Uhlig, H. (1999) A toolkit for analyzing nonlinear dynamic stochastic models easily. In Marimon, R. and Scott, A. (eds.), Computational Methods for the Study of Dynamic Economies, pp. 30–61. Oxford, UK: Oxford University Press.Google Scholar
Uhlig, H. (2007) Explaining asset prices with external habits and wage rigidities in a DSGE model. American Economic Review 97 (2), 239–243.Google Scholar