Resource title

A Macroeconomic Experiment in Mass Immigration

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Resource description

This paper studies the effects of mass immigration from the former USSR to Israel in the 1990s on the employment of the native-born. The exogeneity and the size of this inflow make it a ?natural experiment? of macroeconomic proportions. An open-economy macroeconomic model is used to analyze this experience, focusing on the differential entry of immigrants into the labor and goods markets and the ensuing dynamic implications for labor demand. The reduced form of the model – consisting of two equations for native employment and the relative price of domestic goods – is estimated, finding negative effects of immigration on native employment a year after arrival. The delay in the effect is attributed to a positive impact of immigration on the excess demand for goods and, thus, on the demand for labor earlier on.

Resource author

Zvi Hercowitz, Eran Yashiv

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/21482

Resource license

Adapt according to the presented license agreement and reference the original author.