Analysis of the Impact of Immigration on Labour Market Using Spatial Models

This paper investigates the impact of immigration on employment and unemployment of a host country. The question to answer is: How does employment/unemployment in the host country change after an increase in number of immigrants? The analysis is taking into account only legal immigrants in recession period. The model is combining classical regression of cross-sectional data with spatial econometrics models where cross-section dependencies are captured by a spatial matrix. The intention is by using spatial models analyse the sensitivity of employment/unemployment rate on change in a share of immigration in a region. The used panel data are based on the Labour force survey and on available macro data in Eurostat for 3 European countries (Germany, Austria and Czech Republic) grouped into cells by NUTS regions in a recession period.