Immigration, Trade, and Austrian Unemployment

In this paper we look at unemployment effects of immigration and trade with Eastern Europe in Austria. Using individual data over the period 1989 to 1992 of male blue-collar workers employed in the Austrian manufacturing sector, we decompose possible detrimental impacts in unemployment entry effects and unemployment duration effects. Unemployment entry does not seem to be strongly effected by the recent increase in the flow of immigrants. This is different from the immigration effect on unemployment duration. Within almost all subgroups there is a significant increase in the lenght of unemployment spells as a result of larger immigration. Increases in trade with Central and Eastern European Countries (CEECs) seem to have increased the risk of unemployment entry, and to a lesser extent also the duration of unemployment. This is different from trade with the rest of the world where export increases have an unemployment reducing effect.