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Title:A Macroeconomic Experiment in Mass Immigration PDF Logo
Authors:Hercowitz, Zvi
Yashiv, Eran
Issue Date:2002
Series/Report no.:IZA Discussion paper series 475
Abstract:This paper studies the effects of mass immigration from the former USSR to Israel in the 1990s on the employment of the native-born. The exogeneity and the size of this inflow make it a ?natural experiment? of macroeconomic proportions. An open-economy macroeconomic model is used to analyze this experience, focusing on the differential entry of immigrants into the labor and goods markets and the ensuing dynamic implications for labor demand. The reduced form of the model – consisting of two equations for native employment and the relative price of domestic goods – is estimated, finding negative effects of immigration on native employment a year after arrival. The delay in the effect is attributed to a positive impact of immigration on the excess demand for goods and, thus, on the demand for labor earlier on.
Subjects:immigration
open economy
natives employment
JEL:J61
F16
E24
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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