DP9450 South-South migration and the labor market: Evidence from South Africa

Author(s): Giovanni Facchini, Anna Maria Mayda, Mariapia Mendola
Publication Date: April 2013
Keyword(s): Immigration, Labor market effects, South Africa
JEL(s): F22, J61
Programme Areas: Labour Economics, International Trade and Regional Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=9450

Using census data for 1996, 2001 and 2007 we study the labor market effect of immigration to South Africa. The paper contributes to a small but growing literature on the impact of South-South migration by looking at one of the most attractive destinations for migrant workers in Sub--Saharan Africa. We exploit the variation -- both at the district level and at the national one -- in the share of foreign--born male workers across schooling and experience groups over time. At the district level, we estimate that increased immigration has a negative and significant effect on natives' employment rates -- and that this effect is more negative for skilled and white South African native workers -- but not on total income. These results are robust to using an instrumental variable estimation strategy. At the national level, we find that increased immigration has a negative and significant effect on natives' total income but not on employment rates. Our results are consistent with outflows of natives to other districts as a consequence of migration, as in Borjas (2006).