Immigration, unemployment and GDP in the host country: Bootstrap panel Granger causality analysis on OECD countries

• Main Authors: Ekrame Boubtane, Dramane Coulibaly, Christophe Rault
• Format: Report
• Language: unknown
• Subjects: Norway; Iceland
• Online Access: http://www.cepii.fr/PDF_PUB/wp/2011/wp2011-29.pdf

This paper examines the causality relationship between immigration, Unemployment and economic growth of the host country. We employ the panel Granger causality testing approach of Kónya (2006) that is based on SUR systems and Wald tests with country specific bootstrap critical values. This approach does not assume that the panel is homogeneous and it allows to detect for how many and for which countries of the panel there exists one-way Granger-causality, two-way Granger-causality or no Granger-causality, and takes into account for possible contemporaneous dependence across countries. Using annual data over the period 1980-2005 for 22 OECD countries, we find that, only in Portugal, unemployment negatively causes immigration, while in any country, immigration does not cause unemployment. On the other hand, our results show that, in four countries (France, Iceland, Norway and United Kingdom), growth positively causes immigration, while in any country, immigration does not cause growth. Immigration;GROWTH;unemployment;Granger causality