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How do rigid labor markets absorb immigration? Evidence from France

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  • Anthony Edo

    (CEPII)

Abstract

This paper investigates how immigration can affect the labor market outcomes of native workers when their wages are rigid. I use a rich dataset for France and decompose the native workers according to whether they are covered by fixed-term or indefinite-term contracts. Indefinite-term contracts are associated with higher wage protection than fixed-term contracts that allow firms to adjust wages as contracts expire. I use an empirical methodology which captures the direct effects of an immigrant-induced increase in labor supply on the labor market outcomes of natives who have similar skills. I find that the monthly wage of native workers covered by fixed-term contracts decreases in response to immigration, while employment is the margin through which native workers on indefinite-term contracts is affected.

Suggested Citation

  • Anthony Edo, 2016. "How do rigid labor markets absorb immigration? Evidence from France," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-20, December.
    • Handle: RePEc:spr:izamig:v:5:y:2016:i:1:d:10.1186_s40176-016-0055-1
    DOI: 10.1186/s40176-016-0055-1
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    References listed on IDEAS

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    Cited by:

    1. Edo, Anthony & Rapoport, Hillel, 2019. "Minimum wages and the labor market effects of immigration," Labour Economics, Elsevier, vol. 61(C).
    2. Edo, Anthony & Özgüzel, Cem, 2023. "The impact of immigration on the employment dynamics of European regions," Labour Economics, Elsevier, vol. 85(C).
    3. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr, 2018. "The Effects of Immigration in Developed Countries: Insights from Recent Economic Research," CEPII Policy Brief 2018-22, CEPII research center.
    4. Stefan Jestl & Sandra M. Leitner & Sebastian Leitner, 2022. "The relative impact of different forces of globalization on wage inequality: A fresh look at the EU experience," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1003-1037, September.
    5. Mäkelä Erik & Viren Matti, 2018. "Migration Effects on Municipalities’ Expenditures," Review of Economics, De Gruyter, vol. 69(1), pages 59-86, April.
    6. Chletsos Michael & Roupakias Stelios, 2019. "Do Immigrants Compete with Natives in the Greek Labour Market? Evidence from the Skill-Cell Approach before and during the Great Recession," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-30, April.
    7. Adam Levai & Riccardo Turati, 2021. "The Impact of Immigration on Workers’ Protection," LIDAM Discussion Papers IRES 2021021, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 07 Sep 2021.
    8. Cem Özgüzel, 2020. "The Cushioning Effect of Immigrant Mobility: Evidence from the Great Recession in Spain," Working Papers halshs-03000365, HAL.
    9. Theo Sparreboom & Jesse Mertens & Sandra Berger, 2020. "The Labour Market Impact of Immigration in Three Sub-Saharan African Economies," Journal of International Migration and Integration, Springer, vol. 21(4), pages 1225-1248, December.
    10. Mirjam Bächli & Teodora Tsankova, 2021. "Does Labor Protection Increase Support for Immigration? Evidence from Switzerland," CESifo Working Paper Series 9373, CESifo.
    11. Edo, Anthony & Toubal, Farid, 2017. "Immigration and the gender wage gap," European Economic Review, Elsevier, vol. 92(C), pages 196-214.
    12. Nedoncelle, Clément & Marchal, Léa & Aubry, Amandine & Héricourt, Jérôme, 2024. "Does immigration affect native wages? A meta-analysis," KCG Working Papers 31, Kiel Centre for Globalization (KCG).
    13. Cem Özgüzel, 2021. "The Cushioning Effect of Immigrant Mobility," CESifo Working Paper Series 9268, CESifo.
    14. Levai, Adam & Turati, Riccardo, 2024. "International Immigration and Labor Regulation," IZA Discussion Papers 16929, Institute of Labor Economics (IZA).
    15. Lessem, Rebecca & Nakajima, Kayuna, 2019. "Immigrant wages and recessions: Evidence from undocumented Mexicans," European Economic Review, Elsevier, vol. 114(C), pages 92-115.
    16. Cem Ozguzel, 2019. "Essays on migration and productivity [Essais sur les migrations et la productivité]," PSE-Ecole d'économie de Paris (Postprint) tel-03381203, HAL.

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    More about this item

    Keywords

    F22; J23; J41;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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