Unemployment of Immigrants and Natives over the Business Cycle : Evidence from the Austrian Labor Market

We analyze differences in unemployment between immigrants and natives over the business cycle, using a comprehensive matched employer-employee data set for Austria. We find that the unemployment rate of immigrants from outside the European Economic Area (EEA) is significantly more volatile over the cycle than that of natives. We test for existing theories according to which a greater variability in employment can be due to a selection of workers into specific industries or temporary jobs. We find no evidence for the differential unemployment response of immigrant workers in our sample to be driven by such selection