The Impact of Immigration on Workers’ Protection

Adam Levai and Riccardo Turati

No 2021021, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: Even though the existing literature investigating the labor market impact of immigration assumes, implicitly or explicitly, that labor market regulation is exogenous to immigration (in terms of both size and composition), this is not necessarily the case. This paper shows that labor market regulation responds to the composition of the immigrant population. We build a novel workers’ protection index based on 36 labor law variables over a sample of 70 developed and developing countries from 1970 to 2010. Exploiting a dynamic panel setting using both internal and external instruments, we find that workers’ protection in destination countries is influenced by the degree of workers’ protection that immigrants experience in their origin countries and is not affected by immigrant population size. The effects are particularly strong across two dimensions of workers’ protection: worker representation laws and employment forms laws. This paper provides suggestive evidence that immigrants’ participation in unions and its implications for political actors is one of the potential mechanisms. Finally, calculations based on the estimated coefficients suggest that immigration, on average, contributes to a reduction in workers’ protection, particularly in OECD high-income countries.

Keywords: Migration; Labor Market Institutions; Labor Regulation; Workers’ Protection (search for similar items in EconPapers)
JEL-codes: F22 J61 K31 (search for similar items in EconPapers)
Date: 2021-09-07, Revised 2021-09-07
New Economics Papers: this item is included in nep-int, nep-isf, nep-lab, nep-law and nep-ure
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Impact of Immigration on Workers’ Protection (2022)
Working Paper: The Impact of Immigration on Workers Protection (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:2021021

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