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Revisiting Immigration - Unemployment Relationship in Europe

Author

Listed:
  • Eda Yilmaz
  • Tuğay Günel

Abstract

Immigration is a controversial and vital issue that has become an acute problem for countries facing cultural and economic difficulties resulting from it, and unemployment is at the forefront of these difficulties. According to theory, migration causes unemployment; thus, the causality relationship between migration and unemployment is empirically ex- amined in our study. For this purpose, we used a new test known as the Panel Fourier Toda-Yamamoto (PFTY) method for the period 1990-2019, which contributes to the existing literature from a methodological standpoint. This test allows investigating multiple structural breaks, cross-section dependence and country heterogeneity. Our first test results show that when we use the Dumitrescu-Hurlin (2012) test, the causal relationship is confirmed neither for any country nor the entire panel. However, when we employ the PFTY test, we reach causality runs from migration to unemployment for the entire panel and four countries.

Suggested Citation

  • Eda Yilmaz & Tuğay Günel, 2022. "Revisiting Immigration - Unemployment Relationship in Europe," Politická ekonomie, Prague University of Economics and Business, vol. 2022(6), pages 711-729.
    • Handle: RePEc:prg:jnlpol:v:2022:y:2022:i:6:id:1369:p:711-729
    DOI: 10.18267/j.polek.1369
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    More about this item

    Keywords

    Migration; unemployment; labour market; Panel Granger causality; Fourier function;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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