Lugar: Sala de Reuniones del Departamento de Economía. Edificio Los Madroños, 2ª planta (ECON-2026)

Ponente: Isabelle Chort (Université de Pau et des pays de l'Adour)

Título: Immigration, integration, and the informal economy in OECD countries (trabajo conjunto con Oussama Ben Atta y Jean-Noël Senne)

Abstract: This article investigates the impact of immigrants and asylum seekers’ inflows on the size of the informal sector in host countries from a macroeconomic perspective. We use two indicators of informality provided by Medina and Schneider (2019) and Elgin and Oztunali (2012) combined with immigration data from the OECD International Migration Database and data on asylum seekers from the UNHCR for the period 1997-2017. We resort to a gravity-based instrument for immigrant and asylum seeker flows in order to address endogeneity issues. We find that a one percentage point increase in the stock of immigrants as a share of total population results in a relatively small increase of the informal sector as a share of GDP by 0.05 to 0.06 percentage points. The impact of asylum seekers is four times higher but still limited in terms of economic significance. We additionally use ILO data on informal employment available for a subsample of OECD countries over the period 2011-2017 and find consistent evidence of a larger impact of asylum seekers on informal employment. We find that immigration and integration policies matter: the impact of immigrants and asylum seeker turns insignificant in countries with better integration policies. We find no evidence of any impact of imported norms or institutions from the origin country, but rather that the impact of immigrants and asylum seekers is driven by destination countries with a large informal sector. Our results confirm that the impact of immigrants and asylum seekers on the shadow economy is partly mediated by integration policies and rights of access to the formal labour market.