Jan 2, 2012

Immigrants create more jobs

This paper analyses the impact of a change in Australia’s immigration policy, introduced in the mid-1990s, on migrants’ probability of becoming entrepreneurs. The policy change consists of stricter entry requirements and restrictions to welfare entitlements. The results indicate that those who entered under more stringent conditions – the second cohort – have a higher probability to become self-employed, than those in the first cohort. We also find significant time and region effects. Contrary to some existing evidence, time spent in Australia positively affects the probability to become self-employed.
That is from the abstract of a new paper by Mahuteau et al: "Immigration Policy and Entrepreneurship."
From the concluding remarks and policy implications:
In terms of its economic impact, there is a strong misconception in the immigrant countries that migrants “steal” natives’ jobs and that the cost of immigration outweighs its benefit. This is indeed, to a certain extent, been supported by work of Borjas and others. However, there is overwhelming evidence in favour of the view that immigrants are a net benefit to the receiving countries (Altonji and Card, 1991; Pischke and Velling, 1997;Dustmann et al, 2008). Although our paper has not addressed the particular issue of immigrants’ effect on the Australian labour market, the main result of the paper could be interpreted in the context of the ongoing debate, with the conclusion that immigrants create jobs. In this regard, Australian immigration policy could be considered as one of the main contributors to the job-creating activities in the country.

1 comment:

  1. I don't think the title of this post is appropriate. The abstract indicates that they compared two samples of immigrants, one of which faced stringent entry standards. The sample that faced higher entry standards is more entrepreneurial. Dog bites man. The two tasks of meeting higher entry standards and employing oneself require the same characteristics: intelligence, ambition, competence. This does not inform us on the impact of immigrants in general on job creation.