Institute of European Studies

In this paper we analyze the effect of immigrants on native jobs in fourteen Western

European countries. We test whether the inflow of immigrants in the period 1996-2007

decreased employment rates and/or if it altered the occupational distribution of natives

with similar education and age. We find no evidence of the first but significant evidence

of the second: immigrants took “simple” (manual-routine) type of occupations and natives

moved, in response, toward more “complex” (abstract-communication) jobs. The

results are robust to the use of an IV strategy based on past settlement of different nationalities

of immigrants across European countries. We also document the labor market

flows through which such a positive reallocation took place: immigration stimulated job

creation, and the complexity of jobs offered to new native hires was higher relative to

the complexity of destructed native jobs. Finally, we find evidence that the occupation

reallocation of natives was significantly larger in countries with more flexible labor laws.

This tendency was particularly strong for less educated workers.