Post-industrialisation, Immigration and Unemployment: How and Why the Impact of Immigration on Unemployment Differs between Dutch Cities

Abstract

Studies on the substitution thesis in advanced economies show scattered results: the impact of immigration on the wages and likelihood of unemployment of the less educated varies strongly. Both studies on the substitution thesis itself and studies on the unequal post-industrial development of urban economies, suggest that this is because the substitution thesis is conditional on the type of urban economy. The empirical validity of this suggestion is tested by comparing the impact of immigration on the employment level of the less educated among 22 Dutch metropolitan areas. The findings corroborate the central hypothesis: in strong service-oriented urban economies, the impact of immigration on unemployment levels is mitigated because of high labour demand for the less educated.