The unemployment impact of immigration in OECD countries

Abstract

This paper assesses the consequences of immigration for natives’ unemployment in OECD countries and investigates the role played by product and labour market policies in the adjustment of the economy to immigration inflows. The estimations, combining a skill-level and an aggregate approach using data for males, cover eighteen OECD countries over the period 1984–2003. While no significant long-run impact is found in any case, we find that immigration may have a temporary impact on natives’ unemployment, depending upon the policy framework. In particular, a temporary increase in unemployment may be observed in a context of stringent anticompetitive product market regulation, or of high replacement rates of unemployment benefits.