Do Immigrants Take or Create Residents’ Jobs? Evidence from Free Movement of Workers in Switzerland*

Abstract

In 2002, Switzerland began to adopt free movement of workers with the European Union. We study the effects of the resulting immigration wave on resident workers. We focus on the level of national skill groups and propose an instrumental variable approach to address the endogeneity of immigration in this setting. Mostly relying on administrative data for the 2002–2011 period, we find that the immigration of foreign workers reduced unemployment of residents, and had limited adverse effects on their wages and employment. One reason for this is that younger residents changed to more demanding jobs as a response to the arrival of immigrants.

The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland

“…These findings suggest that high-qualified native workers were more likely to become top-tier managers, possibly as a consequence of the imperfect substitutability with CBW. Using a different identification strategy, Basten and Siegenthaler (2019) also find that the immigrant inflows in Switzerland in the 2002-2011 period caused natives to move towards jobs with higher managerial content. 1.…”

Open labor markets and Firms’ substitution between training apprentices and hiring workers

“…Moreover, while immigration does not affect the employment rate of previously immigrated workers, CBW inflows do: a one percent increase in the workforce due to CBWs decreases the employment rate of previously immigrated workers by 0.2 percentage points. Similarly, Basten and Siegenthaler (2019) find that immigration had limited effects had limited negative effects on natives' employment as well as on their wages. Ruffner and Siegenthaler (2016) explicitly focus on the increase in the number of CBWs in a difference-in-difference approach and conclude that CBWs helped firms overcome their skill shortages and increased firms' productivity without crowding out native employment.…”

‘Crowded out’? Immigration Surge and Residents’ Employment Outcomes in Norway

“…This may also alleviate job competition in the initial area. Re-education and finding a new industrial branch may function in similar ways (Basten & Siegenthaler 2019;Foged & Peri 2016).…”

“…debated issue is how immigration impacts on labor markets, and in particular whether low-skilled natives in advanced capitalist economies face lowered wages and are 'crowded out' of employment by immigrants from less developed countries (Altonji & Card 1991;Basten & Siegenthaler 2019;Foged & Peri 2016). Substantial migration to North America and Western Europe in recent decades (OECD 2012) has raised awareness about this question.…”