Politická ekonomie 2022, 70(6):711-729 | DOI: 10.18267/j.polek.1369

Revisiting Immigration - Unemployment Relationship in Europe

Eda Yilmaz ORCID...a, Tuğay Günel ORCID...b
a Hacettepe University, Faculty of Economics and Administrative Sciences, Department of Public Finance, Ankara, Turkey
b Cukurova University, Faculty of Economics and Administrative Sciences, Department of Public Finance, Adana, Turkey

Immigration is a controversial and vital issue that has become an acute problem for countries facing cultural and economic difficulties resulting from it, and unemployment is at the forefront of these difficulties. According to theory, migration causes unemployment; thus, the causality relationship between migration and unemployment is empirically ex- amined in our study. For this purpose, we used a new test known as the Panel Fourier Toda-Yamamoto (PFTY) method for the period 1990-2019, which contributes to the existing literature from a methodological standpoint. This test allows investigating multiple structural breaks, cross-section dependence and country heterogeneity. Our first test results show that when we use the Dumitrescu-Hurlin (2012) test, the causal relationship is confirmed neither for any country nor the entire panel. However, when we employ the PFTY test, we reach causality runs from migration to unemployment for the entire panel and four countries.

Keywords: Migration, unemployment, labour market, Panel Granger causality, Fourier function
JEL classification: E24, F22, J61

Received: December 6, 2021; Revised: April 29, 2022; Accepted: July 1, 2022; Published: January 25, 2023  Show citation

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Yilmaz, E., & Günel, T. (2022). Revisiting Immigration - Unemployment Relationship in Europe. Politická ekonomie, 70(6), 711-729. doi: 10.18267/j.polek.1369
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