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Abstract: This paper assesses the consequences of immigration for natives’ unemployment in OECD countries and investigates the role played by product and labour market policies in the adjustment of the economy to immigration inflows. The estimations, combining a skill-level and an aggregate approach using data for males, cover eighteen OECD countries over the period 1984–2003. While no significant long-run impact is found in any case, we find that immigration may have a temporary impact on natives’ unemployment, depending upon the policy framework. In particular, a temporary increase in unemployment may be observed in a context of stringent anticompetitive product market regulation, or of high replacement rates of unemployment benefits. [Copyright &y& Elsevier]

Immigration pressures are increasing in most OECD countries. This article investigates the consequences of immigrationfor natives' labour market outcomes, as well as issues linked to immigrants' integration in the host country labour market. Changes in the share of immigrants in the labour force may have a distributive impact on natives' wages, and a temporary impact on unemployment. However, labour market integration of immigrants (as well as integration of second-generation immigrants both in terms of educational attainments and of labour market outcomes) remains the main challenge facing host economies. In both cases, product and labour market policies have a significant role to play in easing the economy's adjustment to immigration. [ABSTRACT FROM AUTHOR]