Immigration and Unemployment: New Evidence From 13 European OECD Countries

This study employs annual panel data from 13 OECD countries in Europe spanning the period 2001–2019 to empirically examine the link between immigrants and unemployment. The PMG method, which can be applied in both stationary and nonstationary variables, is used for this estimation. The results provide evidence that an influx of immigrants has a negative effect on the rate of unemployment for native‐born workers, whereas it is positively associated with that of foreign‐born workers in the long term. However, the results are mixed in the short term. It is further found that the adjustment speed to long‐run equilibrium is relatively slow, suggesting the need for active labor market policies.