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The Role of Labor Market Institutions in the Impact of Immigration on Wages and Employment

Author

Listed:
  • Mette Foged

    (University of Copenhagen, CReAM and IZA)

  • Linea Hasager

    (University of Copenhagen)

  • Vasil Yasenov

    (Immigration Policy Lab, Stanford University, and IZA)

Abstract
We study the role of institutions in affecting the labor market impacts of immigration using a cross-country meta-analysis approach. To accomplish this, we gather information on 1,030 previously estimated wage effects and 432 employment effects of immigration from 61 academic studies covering 18 developed countries. The mean and median impact on the relative wage of directly exposed native workers are negative and significantly different from the small positive mean and median impact on the average wage level. This pattern is reversed for employment effects where the magnitudes are smaller. We combine this database with country-level data on labor market institutions from the OECD. The results suggest that institutions may shield native workers from distributional (relative) wage consequences of immigration but exacerbate the impacts on average wages in the economy. We do not detect a significant and robust association for the employment effects of foreign workers.

Suggested Citation

  • Mette Foged & Linea Hasager & Vasil Yasenov, 2021. "The Role of Labor Market Institutions in the Impact of Immigration on Wages and Employment," RF Berlin - CReAM Discussion Paper Series 2107, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
  • Handle: RePEc:crm:wpaper:2107
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    References listed on IDEAS

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    3. Levai, Adam & Turati, Riccardo, 2024. "International Immigration and Labor Regulation," IZA Discussion Papers 16929, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    immigration; wages; employment; labor market institutions; meta-analysis;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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