Employment Protection and Migration

Abstract

We argue in this paper that labor market institutions, and more particularly employment protection (EPL), are an important determinant of migration. Using a bilateral migration database, we empirically show that the employment protection di fferential has a negative impact on bilateral ows. Contrary to pop- ular wisdom which assumes that migrants look for a more protected market, we show that migrants tend to move to countries where employment protection is close to that of their country of origin. Relative preferences over wages or employment, or a distinct impact on wages and employment may explain such results. We also show that these e ffects are stronger for high-skilled workers