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Theoretical and Applied Economics
No. 1 / 2021 (626), Spring

How do immigration impact unemployment and economic prosperity? An extensive investigation from the OECD nations

Swapnanil SENGUPTA
The University of Manchester, United Kingdom
National Institute for Economic Research “Costin C. Kirițescu”, Romanian Academy, Bucharest, Romania

Abstract. Acknowledging the fact that immigration crisis is one of the most debated and challenging phenomena, especially in most of the OECD countries, this study involves a utilisation of the panel econometric techniques like Panel Error Correction Model, FMOLS and DOLS to empirically analyse the direction of the effects of immigration on native unemployment, in both the short and the long run, in aggregate. The analysis has been performed on a sample of 33 OECD countries between 1990 and 2017. The results suggest that immigration reduces unemployment in the short as well as the long-run. The impacts of immigration on unemployment are confirmed with a series of robustness tests using different estimation techniques and combination of regressors.

Keywords: immigration; unemployment; OECD; panel error correction model.

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