A common explanation for the growth in unemployment in southern Europe after the Great Recession is lack of flexibility in over-regulated labour markets. This column examines wage adjustment in regulated and unregulated labour markets in Italy during the recent crisis. Using data on immigrant workers, it shows that before the crisis wages in the formal and informal sectors moved in parallel. During the crisis, however, formal wages did not adjust downwards, while informal labour wages did. Greater flexibility in wages in the formal market could slow the decline in employment.
Sergei Guriev, Biagio Speciale, Michele Tuccio, 13 September 2016
Marco Buti, Muriel Lacoue-Labarthe, 07 September 2016
The Eurozone Crisis has taken a significant toll – both economic and political – on EU member states as well as the Union as a whole. This column identifies three elements that are key to a working solution for continued union: overcoming the intergovernmental method that has dominated EU decision‑making since the crisis, avoiding the seemingly easy route of blaming all evils on ‘Brussels’, and a more unified external representation in global economic governance.
Gylfi Zoega, 01 September 2016
Britain’s decision to leave the EU surprised many. This column examines the relationship between economic prosperity and voting behaviour in the referendum. The regions that have benefitted most from immigration and trade voted most strongly in favour of remaining, while the regions where people feel most threatened voted to leave. In other countries fearing a similar EU exit, economic policy should aim to ensure that the gains from trade and immigration are as widespread as possible.
Jonathan Portes, 11 August 2016
Free movement of workers within the EU is an essential principle of the EU. In this video, Jonathan Portes discusses the impact of Brexit on UK immigration. This video is part of the “Econ after Brexit” series organised by CEPR and was recorded on 14 July 2016.
Jonathan Portes, 11 August 2016
Immigration was a major factor – perhaps the major factor – in the Brexit vote. This column asks what the result of the referendum means for the UK’s immigration policy. It looks likely that the UK’s negotiating position may coalesce around an ‘EEA minus’ arrangement. While free movement would not continue as now, this would not imply moving to a system that gives effectively equal treatment to EU and non-EU nationals; there would still be a considerable degree of preference for the former. The negotiations would likely be legally, economically, and politically complex, but this does not mean that it is not worth trying.
Sari Pekkala Kerr, William Kerr, 10 August 2016
Increased hostility to immigration has been a key driver of the rise of right-wing populist movements across the world. At the same time, local governments – notably in the US – have designed work programmes to attract immigrant entrepreneurs to their areas. This column explores the types of businesses founded by immigrants and their growth patterns, and examines how these outcomes relate to immigrants’ age at arrival to the US. Immigrant entrepreneurs experience greater volatility – they fail more frequently, but those that persist experience greater employment growth than their native counterparts.
Klaus Desmet, Ignacio Ortuño-Ortin, Romain Wacziarg, 31 July 2016
The current refugee crisis has highlighted the importance of understanding how ethnic and cultural differences affect social cohesion. This column investigates the links between ethnicity and culture, and the relationship between diversity and civil conflict. It finds that globally, there appears to be little overlap between ethnic identity and cultural identity. Also, ethnic diversity per se has no effect on civil conflict. It is when differences in culture coincide with differences in ethnicity that conflict becomes more likely.
Yuxin Yao, Asako Ohinata, Jan van Ours, 09 May 2016
Language skills play an important role in labour market performance. This column uses evidence from the Netherlands to assess whether speaking a dialect affects a child’s educational performance. It finds that speaking Dutch dialects affects the academic performance of some young children. While it has a modestly negative effect on boys' language test scores, there is no effect on language tests for girls. Dialect-speaking does not affect scores in maths tests. The share of dialect-speaking peers in the classroom does not affect the test scores of either Dutch-speaking children or dialect-speaking children.
Guglielmo Barone, Alessio D'Ignazio, Guido de Blasio, Paolo Naticchioni, 19 April 2016
The recent refugee crisis in Europe has highlighted that increased immigration leads to political success for extreme right-wing parties. This column uses evidence from three elections in Italy to quantify the impact immigration has on the political success of non-extreme right-wing parties. In the Italian case, immigration leads to bigger gains for centre-right parties than extreme right parties.
Giovanni Peri, Anna Maria Mayda, Walter Steingress, 02 February 2016
Immigration is an important election issue that often benefits right-wing political parties. Contemporary European politics is an example par excellence. Immigration in the US has been intermittently at the fringes and centre-stage in recent years, and this column looks at the extent to which US voters care about immigration. The political effect of immigration turns out to crucially depend on the extent to which immigrants participate in the political process. One thing from the research is clear: Republicans are generally opposed to immigration reforms, especially if they include a path to citizenship for currently undocumented immigrants. Naturalised immigrants are a liability for conservative politicians, as they tend to vote for progressive parties.
John Gibson, David McKenzie, Halahingao Rohorua, Steven Stillman, 26 January 2016
Wage differences across countries offer individuals the possibility of huge wage gains through moving abroad. This column uses data on lottery-selected migrants from Tonga to New Zealand to assess the effect on productivity and wages for workers moving from a poor country to a rich country. These randomly selected workers appear to be immediately more productive, and their wage gains are stable over time. It seems that cross-country wage differences are due to better institutions, higher quality capital, and other factors in rich countries that serve to raise the productivity of all workers, whether natives or migrants.
Scott Ross Baker, Nicholas Bloom, Steven Davis, 15 December 2015
The recent influx of refugees to Europe has stoked security fears and created anxiety about the social and economic consequences. This column provides new quantitative indicators for the intensity of migration-related fears and policy uncertainty, based on newspaper articles. The indices are presented for the US, UK, France, and Germany, and extend back to 1995. They show that recent levels of concern and uncertainty in European countries about migration are unprecedented.
Stefano Breschi, Francesco Lissoni, Ernest Miguelez, 07 December 2015
We traditionally think of migrants draining their home country of knowledge and skills, and, instead, giving their all to their host country. Based on patent and inventor data, this column looks at knowledge diffusion conveyed by highly skilled migrants both within their host country as well as back to their homelands. China, South Korea and Russia seem to profit from their diaspora’s knowledge generation but the same can’t be said for India.
Tito Boeri, Marta De Philippis, Eleonora Patacchini , Michele Pellizzari, 24 November 2015
How a host country can best assimilate immigrants is understandably on the minds of West European governments. This column presents new evidence that immigrants in Italy who live in neighbourhoods with a large share of non-Italians are significantly less likely to be in employment than their counterparts in less segregated areas. Furthermore, the negative effect of a large migrant share on employment is magnified by the presence of illegal immigrants in the neighbourhood. This suggests that keeping a large share of illegal immigrants in a country may exert negative externalities on those migrants who have legal status.
Simone Moriconi, Giovanni Peri, 19 October 2015
Unemployment rates vary widely across EU countries. While national institutions and policies explain much of the variation, cultural values, attitudes, and beliefs may also play a role. This column uses survey data from 26 EU countries to investigate the existence of culturally transmitted preferences for work. Country-specific preferences for work are found to have a positive effect on emigrants’ labour market outcomes, with those from countries with an above-average preference for work having higher employment rates abroad. Cultural preferences are significant enough that EU countries may never converge to the same employment rate.
Emilie Anér, Anna Graneli, Magnus Lodefalk, 14 October 2015
A large body of research has established a positive link between immigrants and bilateral trade. However, the temporary movement of people across borders has received less attention. This column uses Swedish data to analyse the impact of temporary cross-border movement on trade. Recently arrived migrants are found to reduce the negative impact of distance on foreign trade, by assisting firms to overcome informal and informational barriers to trade with their origin country. Facilitating movement of people across borders can be a highly useful tool for engaging in and benefitting from specialised and internationalised production networks.
Gianmarco Ottaviano, Giovanni Peri, Greg Wright, 17 June 2015
International trade in services and immigration are among the fastest growing aspects of globalisation. Using UK data, this column explores the links between these phenomena. Immigrants promote exports of final services to their home countries, while also reducing imports for some intermediate services, and bringing productivity gains to the labour market. In designing immigration policies, it is important that the potential impact on exports and offshoring activities are carefully considered.
Assaf Razin, Efraim Sadka, Benjarong Suwankiri, 17 January 2015
Allowing greater immigration may raise tax revenue and help pay for the welfare state, but it also affects the future composition of the voting population. This column discusses a political-economy model in which the largest group in a winning coalition chooses tax and immigration policies, and explains how the composition of the voting population changes over time.
Ian Preston, 05 November 2014
Data on social attitudes show that the perceived burden of immigration on a nation’s public finances is one of the strongest economic concerns associated with hostility to immigration. Yet recent official reports suggest an important positive role for immigration in the long-run health of public finances. This column argues that there can be no general conclusions applicable in all circumstances about whether immigration is favourable or unfavourable for public finances. But evidence is emerging on particular cases through studies of immigrant composition and use of services, and the effects of immigration on native outcomes.
Frédéric Docquier, Çağlar Özden, Giovanni Peri, 06 October 2014
Researchers have devoted little attention to the effects of emigration from OECD countries, and the absence of detailed emigration data is the main culprit. Using a new and improved migration database, this column analyses the effect of migration on the wages of less educated native workers. The results suggest that, as far as labour market outcomes of less educated workers are concerned, governments should worry less about new arrivals and more about the potential consequences of their high emigration rates.