Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/194143 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
WIFO Working Papers No. 568
Publisher: 
Austrian Institute of Economic Research (WIFO), Vienna
Abstract: 
Austria's Beveridge Curve has shifted markedly outwards since labor market access for Eastern European neighbors was liberalized in 2011. I quantify the effects of labor supply shocks by means of a structural VAR with sign restrictions, distinguish domestic-worker from foreign-worker shocks and find that the latter contributed considerably to the counter-clockwise outward movement. On impact, the arrival of additional job seekers facilitates matching but it lowers the chance for existing job seekers to be matched, raising employment and unemployment simultaneously. In the medium run vacancies increase, the employment surge accelerates and unemployment declines. Labor supply shocks caused by foreigners have an unambiguous and positive effect on domestic employment in the long run, indicating complementarity between foreign and domestic labor. On a regional level Vienna, the capital in the east of the country, was most heavily exposed to the recent labor immigration boom.
Subjects: 
labor supply shocks
Beveridge Curve
job-related immigration
sign restrictions
structural VAR
JEL: 
C32
F66
J21
J63
Document Type: 
Working Paper

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