Essays on international migration

Immigration has become an increasingly salient issue across Europe in recent years. However, much of the existing economics literature focuses on the impact of immigration on labour markets. In order to gain a more complete understanding of the impact of immigration on a host country, it is important to take a broader perspective. In this thesis we investigate some of the wider effects of immigration on host countries and their native citizens. The thesis contains three self-contained chapters, each of which tries to establish the causal effects of immigration on a separate socio-economic aspect of the host country. Chapter 2 investigates the causal link between migration and trade flows. We exploit the large, exogenous increase in migrants to the UK as a result of the 2004 EU enlargement. In contrast to the standard gravity model approach, we use a difference-in-differences estimation strategy, which enables us to compare changes in UK trade flows with accession countries to changes in UK trade flows with other central and eastern European countries. At the product level, separating goods according to their informational content using the classification put forward by Rauch (1999), we find evidence that UK imports from accession countries increased, and that this was driven by differentiated goods. In Chapter 3 we investigate whether the proportion of migrants in a local area affects the success of an anti-immigration political party. Using Swedish municipality-level data, we focus on the impact of large inflows of migrants, many of whom were refugees, from non-OECD countries in the 1980s and 1990s. In order to address concerns over the endogeneity of migrant location, we exploit a refugee placement policy which aimed to disperse refugees across the country. Initial OLS estimates suggest that a one percentage point increase in the migrant share is associated with a 0.28 percentage point increase in the New Democracy vote share. However, we do not find evidence of a positive relationship between the arrival of refugees and the New Democracy vote share in our 2SLS estimation. Further analysis suggests that our OLS results are driven by municipalities surrounding the three major urban areas of Stockholm, Gothenburg and Malmo. In addition, we find no evidence that natives responded to an influx of migrants by relocating to another area. In Chapter 4 we examine the relationship between immigration and house prices. Focusing on the case of England and Wales, we exploit variation in migrant inflows across local authority districts to identify the effects of migration on changes in house prices. We build on existing papers by conducting the analysis at the local authority district level which enables us to better account for unobserved local level characteristics. In addition, we then exploit data on the postcode of each individual housing transaction in an attempt to better control for housing quality. In our OLS specifications we find no conclusive evidence of any relationship between migrant inflows and changes in house prices. We then address endogeneity concerns by using an instrument based on historical settlement patterns. Although our 2SLS estimates suggest that a 1% increase in the migrant share is associated with a 2.4% fall in house prices, we show that this effect is driven by local authorities in London, and that our instrument based on historical migrant settlement patterns is weak and fails to fulfil the relevance requirement for local authorities outside of London. These findings cast doubt over the suitability of the shift-share instrument for addressing endogeneity concerns in this setting