Dominique M. Gross

Three million foreigners, three million unemployed? Immigration flows and the labour market in France

This paper investigates the effect of the flows of immigrant workers on the French labour market from the mid-1970s to the mid-1990s. Using a system of equations for unemployment, labour-force participation, the real wage and the immigration rate, it is shown that, in the long run, both legal and amnestied immigrant workers, and immigrant families lower the unemployment rate permanently. In the short-run, the arrival of immigrants increases unemployment slightly with an impact effect similar to that of an increase in domestic labour-force participation. The composition of immigration flows matters and the results indicate that the distribution between workers from the European Union and other regions of the world, also more skilled and less skilled workers, should remain balanced.

Aggregate job matching and returns to scale in Germany

Abstract It is found that, in 1984, the German matching function shifted from increasing to constant or even decreasing returns to scale. Such a regime-shift is consistent with a move from a multiple-equilibria environment to a single-equilibrium state where policies lose effectiveness.

Temporary Foreign Workers and Regional Labour Market Disparities in Canada

Temporary foreign worker programs are typically seen as short-term solutions to shortages of regional or occupational labour. During the past decade, Canadian regions experienced unequal economic growth, and some suffered from significant excess labour demand. The Canadian Temporary Foreign Worker Program was thus expanded and conditions to access it made easier. During the same period, the pattern of regional disparities in unemployment rates became more persistent. This paper shows that some of the persistence is due to the increased availability of temporary foreign workers. This suggests that policy makers did not price them correctly to avoid adverse effects on the Canadian labour market.

Exchange rate pass-through and rivalry in the Swiss automobile market

Exchange Rate Pass-Through and Rivalry in the Swiss Automobile Market. —This paper investigates the pricing rivalry among foreign automobile producers in the Swiss market. The main results from the dynamic analysis of two categories of automobiles between 1977 and 1991 are: First, the degree of exchange rate pass-through differs among source-countries despite the absence of quantitative restrictions on imports and of domestic production facilities. However, for some countries, pricing strategies show remarkable consistency across product categories and time spans. Second, the degree of exchange rate pass-through is low, especially in the market for small-size automobiles. Third, this low degree of pass-through may be attributed to a low degree of competition among foreign sellers.ZusammenfassungWeitergabe der Wechselkursschwankungen und Wettbewerb auf dem Schweizer Automobilmarkt. —Die Verfasser untersuchen das Preisverhal-ten ausländischer Automobilhersteller auf dem Schweizer Markt. Aus der dynamischen Analyse zweier Kategorien von Automobilen zwischen 1977 und 1991 ergeben sich als Hauptresultate: Erstens differiert das Ausmaß, in dem Wechselkursschwankungen wei-tergegeben werden, nach dem Ursprungsland, obwohl es keine quantitativen Importbe-schränkungen und keine heimischen Produktionsmöglichkeiten gibt. Allerdings erwei-sen sich für einige Länder die Preisbildungsstrategien unabhängig von Produktkategorie und Zeitspanne als bemerkenswert gleichförmig. Zweitens ist das Ausmaß der Weiter-gabe von Wechselkursschwankungen niedrig, besonders auf dem Markt für Kleinwagen. Drittens könnte dieses geringe Ausmaß der Weitergabe darauf zurückzuführen sein, daß der Wettbewerb zwischen ausländischen Verkäufern schwach ist.

Temporary Foreign Workers in Canada: Are They Really Filling Labour Shortages?

Since easier access to a large supply of foreign labour might generate undesirable incentives on the part of both employers and prospective workers, a Temporary Foreign Worker (TFW ) program requires careful design. Failure at any stage of the process – at time of hiring, during employment, or at the end of the contract – is likely to create significant negative effects on domestic workers and, in the medium term, on the temporary foreign workers themselves. When choosing between domestic and foreign workers, employers are naturally concerned about labour costs and labour productivity. Therefore, a key design feature of any TFW program is the hiring conditions it imposes on employers – conditions that must deal with regional or occupational labour market shortages. Between 2002 and 2013, Canada eased the hiring conditions of TFWs several times, supposedly because of a reported labour shortage in some occupations, especially in western Canada. By 2012, the number of employed TFWs was 338,000, up from 101,000 in 2002, yet the unemployment rate remained the same at 7.2 percent. Furthermore, these policy changes occurred even though there was little empirical evidence of shortages in many occupations. When controlling for differences across provinces, I find that changes to the TFWP that eased hiring conditions accelerated the rise in unemployment rates in Alberta and British Columbia. The reversal of some of these changes in 2013 is welcome but probably not sufficient, largely because adequate information is still lacking about the state of the labour market, and because the uniform application fee employers pay to hire TFWs does not adequately increase their incentive to search for domestic workers to fill job vacancies.

Immigration policy and foreign population in Switzerland

With more than 20 percent, Switzerland is one of the countries with the largest foreign population. Since 1970 the government has tried to manage the flows of migrants in the hope of reconciling a chronic excess demand for labor with mounting pressures from nationalistic groups to control the level of foreign population. A policy of quotas on work permits has been effective in controlling the entry of new workers. Nevertheless, the overall dynamic of the system has led to an ever-increasing share of newcomers not covered by quotas. Because of institutional and economic changes, the outflow did not react to economic incentives as the government expected. Hence, at the beginning of the 21st century, the link between the instruments of immigration policy and its goal has become very weak and the level of foreign population is at an all time high. However, a new era has begun with an agreement on free mobility with European Union and European Free Trade Area (EFTA) countries.

Three Million Foreigners, Three Million Unemployed? Immigration and the French Labor Market

This paper investigates the effects of the flows of immigrant workers on the French labor market between the mid-1970s and mid-1990s. Using a system of equations for unemployment, labor-force participation, the real wage, and the immigration rate, it is shown that, in the long run, legal and amnestied immigrant workers, and their families, lower the unemployment rate permanently. In the short run, the arrival of immigrants increases unemployment slightly with an impact similar to that of an increase in domestic labor-force participation. The composition of immigration flows matters, and the proportion of skilled and less-skilled workers should remain balanced.

Immigration Flows and Regional Labor Market Dynamics

The paper analyzes the ability of a regional labor market to absorb growing flows of immigrant workers with declining levels of skills during relatively high unemployment. The impact of the size of the flow and the skill characteristics of the immigrants are analyzed. It is found that immigration is positively related to unemployment in the short run but in the long run is negatively related. Also, a higher average skill level among immigrants makes them more effective in their job search in the short run. Finally, increasing the discrepancy between the skill distribution of immigrants and that of the existing workforce is desirable, as both types of labor appear to be complements in the short-run.

Low- and high-skill migration flows: free mobility versus other determinants

We investigate what economic factors drive international migration of workers to France and how their influence varies across different skill levels under restrictive policies and through time as free mobility is implemented. We find that neither incentives nor policy parameters are similar across skill levels. Migration drivers such as a network of compatriots and relative incomes influence the movement of low-skill workers. High-skill individuals however move only according to financial opportunities be they standard of living or returns to skill within a class. We conclude that competition for high-skill workers among Organization for Economic Co-operation and Development (OECD) countries requires more than free mobility to successfully attract high-skill migrants even for a developed country such as France.

Immigration to Switzerland - the case of the Former Republic of Yugoslavia

From less than 5 percent in 1980, the share of residents from the former Republic of Yugoslavia in the total foreign population in Switzerland rose to almost 25% in 2000, to become one of the largest foreign communities. The largest increase occurs mostly between 1985 and 1998 and represents a unique development in the composition of immigration to Switzerland, as it coincides with a new policy, which from 1995 gives priority to workers from the European Union for new permits and severely restricts work permits for migrants from the rest of the world. The empirical analysis shows that when there is no discriminatory treatment by immigration policy, immigrant workers from the former Yugoslavia respond to financial and cultural incentives in the same way as their unskilled counterparts from Southern European countries. The restriction on permit availability in the mid-1990s appears to have weakened the financial and cultural attractiveness of Switzerland for immigrants from the former Yugoslavia. This may signal a change in the characteristics of migrants from the region toward higher skill levels.