The Effects of Immigration on Regional Unemployment Rates in The Netherlands

Abstract

The impact of immigration on the change in the unemployment rate in the Netherlands is analyzed using panel data from 26 labor market regions from 1996 through 2003. This study measures immigration through the year-to-year change in the foreign population, paying particular attention to immigrants of non-Western origin. Other variables controlling the composition of the local labor market include: occupation shares, the fractions of workers employed in high- and low-skilled jobs, the fractions of female workers, part-time employees, labor force participants over the age of 55, educational attainment shares, and population density. The ordinary least squares (OLS) results indicate a change in the foreign population in the labor force led to a statistically significant increase in the upward volatility of Dutch unemployment rates while the change in the non-Western share had no significant effect.