An Empirical Analysis of the Dynamic Impact of the Inflow of Immigrants on Wage and Employment based on PVAR Model

Abstract

The inflow of migrants is usually considered to be crowding out the target country jobs from a static point of view, resulting in excess supply of labor, reducing the level of wages and other negative effects, especially in less developed countries are more convinced. Therefore, it is an important issue to study the impact of immigration on the target country's wage level and employment. In this paper, based on the 2000-2014 data of OECD countries, the PVAR model is established to study the direction and intensity of the impact of immigration on the target country's wage level and employment by using the method of generalized moment estimation, impulse response analysis. The empirical results showed that: in the short term, the inflow of immigrants increases the target country's average wage level and employment rate, In the long run, the stock of immigrants will have a significant negative effect on the average wage level of the target country and have a positive impact on the employment rate but less contribution.