Three million foreigners, three million unemployed? Immigration flows and the labour market in France

This paper investigates the effect of the flows of immigrant workers on the French labour market from the mid-1970s to the mid-1990s. Using a system of equations for unemployment, labour-force participation, the real wage and the immigration rate, it is shown that, in the long run, both legal and amnestied immigrant workers, and immigrant families lower the unemployment rate permanently. In the short-run, the arrival of immigrants increases unemployment slightly with an impact effect similar to that of an increase in domestic labour-force participation. The composition of immigration flows matters and the results indicate that the distribution between workers from the European Union and other regions of the world, also more skilled and less skilled workers, should remain balanced.