Myth that immigrants “steal jobs”: an economic blame game?

Abstract

The economic impact of migration has several dimensions. These include positive economic consequences for the host country, such as a possible effect on economic growth, an improvement in the labour market through job creation and on the prices consumers pay for goods and services. Many economists, journalists and politicians have been very verbal on whether immigrants have a positive or negative impact on a host country’s labour market and its economy as a whole. In addition, there exists a stream of literature which argues that, in terms of the labour market, citizens and immigrants will never be perfectly substitutable. The purpose of this article is to arguably dispel the myth that a high level of immigrants causes unemployment and it explores the impact of migration on the labour market in general. It argues that presuming a general equilibrium, immigrants do not only affect labour supply, but also labour demand. This is because immigrants do not only serve as additional workers available to the labour supply, but also as additional consumers, and consequently provide a boost for the local labour market by increasing demand for unskilled and semi-skilled labour. This paper concludes that immigrants do not only have a positive effect on labour markets but also contribute to the wellbeing of the host country’s citizens’ wage. Furthermore, policy implications are highlighted and suggestions for quantitative research on the topic are made.