Revisiting immigration – unemployment relationship in Europe
Revisiting immigration – unemployment relationship in Europe

Summary/Abstract: Immigration is a controversial and vital issue that has become an acute problem forcountries facing cultural and economic difficulties resulting from it, and unemployment isat the forefront of these difficulties. According to theory, migration causes unemployment;thus, the causality relationship between migration and unemployment is empirically examinedin 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 existingliterature from a methodological standpoint. This test allows investigating multiple structuralbreaks, cross-section dependence and country heterogeneity. Our first test results show thatwhen we use the Dumitrescu-Hurlin (2012) test, the causal relationship is confirmed neitherfor any country nor the entire panel. However, when we employ the PFTY test, we reachcausality runs from migration to unemployment for the entire panel and four countries.

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