Socio-Economic Effects of Immigration in Greece

Abstract

The undocumented economic immigrants (UEI) in Greece (about half a million since the early 1990s, forming the bulk of the immigration to the country) find jobs because of their wage and job-flexible labour and the rigidities in the Greek labour market. They have positive effects on the GDP through the increase in the supply of labour, and there is evidence that they also contribute to relieving the inflationary pressures on the economy. The immigrant-induced unemployment, the decreasing effect on real wages and the adverse distributional effects on income appear to be limited, but other tangible and intangible socio-economic costs are likely to be significant: the UEI expand further the underground economy, although their work is not among its main causes; they – among others – are often subject to exploitation, which exposes Greece to criticism that it benefits from their labour without offering them any opportunity to integrate economically and socially. Despite ample evidence that the recent increased criminality in Greece is mainly due to individuals and organized gangs who enter in order to commit crimes, usually in close collaboration with local people, many Greeks believe that the UEI are the main cause. Finally, by restricting increases in real wage costs, the UEI may have diminished the efforts to increase capital investment and economic restructuring. Until January 1998, when the five-month registration period for their regularization started, the undocumented immigrants – mostly young people without their families – had a short average stay in the country and no civil rights. Consequently, the ‘positive’ demographic and social effects of immigration have been limited.

The economic impact of immigration in Greece: taking stock of the existing evidence

“…This is probably the most important reason why employers seem to prefer immigrants to Greeks, assuming they have the choice. Other reasons could be the flexibility of immigrants in performing different jobs and their higher degree of geographical mobility in comparison with native workers (Fakiolas, 1999). Lower immigrants' wages are not necessarily due to lower qualifications.…”

“…Despite the fact that the idea that immigrants replace natives and, thus, increase unemployment among the latter is widely spread among the general public, Fakiolas & King (1996), Iosifidis & King (1998) and Fakiolas (1999) argue that this is not the case for Greece, since immigrants are usually employed in jobs that the natives turn down. Likewise, Hatziprokopiou (2005) argues that immigrants are typically employed in manual jobs in the construction or manufacturing sector (including small workshops) or jobs at the bottom-end of the service sector ladder 19 Further, Kontis et al (2006) point out that the arrival of new immigrants most probably has negative effects on the wages of old immigrants, since these two groups of workers are likely to be close substitutes.…”

“…On the other hand, if immigrants are considered complementary to skilled workers and capital (mostly in small firms), they may contribute to the increase in their returns. According to Fakiolas (1999) andGlytsos (2005) this is one of the positive effects of immigrants, since they have helped widening what they consider to be an artificially narrow wage differential between unskilled and skilled labour -maintained since the late 1970s by trade union pressures and minimum wage legislation-and, therefore, they have contributed to higher economic efficiency. Thus, they conclude that immigration is likely to have led to increases in income inequality in general and earnings inequality in particular.…”

“…Immigration is a very important source of labour in these sectors. In fact, Fakiolas & King (1996) and Fakiolas (1999) go as far as suggesting that many firms would have been shut down -had it not been for immigrants -with negative effects on employment and production. More recent studies (Fakiolas, 2000;Lyberaki & Pelagidis, 2000;Labrianidis & Lyberaki, 2001) broadly agree with the view that immigrants helped small and medium size firms survive and, in some cases, increase their competitiveness and profits.…”

Immigrant Associations, Integration and Identity : Angolan, Brazilian and Eastern European Communities in Portugal

“…As a number of studies have pointed out (Salt 1992;Fakiolas 1999;Anderson 2000;Hjornø 2003), undocumented migrants are often more prone to labour market exploitation than those who settle in a host country in a legal fashion. In Portugal, with the government's hesitation in legalising undocumented migrants (many of whom are already inserted into the labour market), it has been easy for employers to exploit undocumented migrants, pay them lower wages (or not pay them at all), deprive them of their rights, and not comply with their fiscal obligations and social security payments (Peixoto 2002).…”