Effect of Welfare and Employment Policies on the Correlation between Migration and Unemployment

Abstract

IntroductionImmigration and its various aspects1 have been on the public and political agenda in most established countries for many years. Accelerated immigration is a result, among other things, of increased mobility stemming from cheaper and easier means of transportation, the widening wealth gap between industrialized and other countries that is leading many people to leave their country of origin in the hope of arriving at a country that seems to afford a better life, and local and regional conflicts2 creating tens of thousands of homeless and refugees. Incoming immigration has a considerable impact on a country's culture, demographics, politics, and religion, as well as on the local economy and labor market, as evident in many countries that have experienced such waves throughout history (Goldin et al., 2012; Lewis & Peri, 2014).This study has two interlinked goals: One is to detect and establish a correlation between the extent of immigration and changes in the rate of unemployment, by examining previous immigration trends in three prominent immigration destinations (Greece, Germany, and the United States) and analyzing their impact on the local employment market. The second is to locate an intervening variable associated with a country's welfare and employment policy that affects the structure of the domestic employment market and may be capable of influencing and even determining the direction of the correlation detected (or not) between these two indices. The research method will be based on a correlative analysis of immigration and unemployment data for the three immigration destinations mentioned above, while examining the welfare and employment policies in each of these countries.The growing stream of Syrian refugees across the borders of European Union (EU) countries in general3 and Greece and Germany in particular has earned the issue of immigration's impact on destination countries a renewed place on the public and research agenda (Ethan & Peri, 2015). Examination of previous immigration trends indicates that the economic effect of immigration on the host country is not clear-cut (Drinkwater, 2003; Waters et al., 2009). In some cases, immigrants contributed considerably to the local economy. One example is the mass immigration of Jews from the former Soviet Union to Israel upon the former's dissolution in the early 1990s (DellaPergola, 1998).Then again, there are many testaments to the negative and undesirable impact of immigration on the domestic economy. One example is the immigration of Mexicans, Cubans, and Asians to the United States in the previous century, whose impact on the local labor market and its pay levels have been studied extensively (Portes & Bach, 1980; Portes & Stepick, 1985; Wilson & Portes, 1980; Saiz, 2003).1.A review of immigration around the world throughout historyAs stated, immigration, both between countries and between continents, is a phenomenon that has recurred throughout human history in different periods, from and to different places, and for different reasons and causes. Conspicuous examples are the extensive and lengthy waves of immigration from Canada and China to the United States from the early 19th and until the mid-20th century (Ramirez, 2009; Ramirez & Otis, 2001), and later on also immigration from Latin American and Asian countries to the United States in the 1980s and 1990s, (Saiz, 2003; Waters et al., 2009). These periods of immigration, deriving from the US immigration policy, strongly affected the local society and economy (Borjas, 2011).In Europe as well, immigration has played a major role, particularly since the conclusion of World War II. Examples are illegal Italian immigration to France and Switzerland (Rinauro, 2014), as well as the migration of Italian citizens across the borders of West Germany (Rieder, 2004). Also notable is the official Dutch emigration program (during 1945-1960) that encouraged local farmers to leave its rural areas for Canada (Flora, 2012; Fallon, 2000; Schryer, 1998), as well as the movement of citizens from various European countries (such as Poland, Germany, and Italy) to Brazil (Bastos & Do Rosario, 2012). …