This paper assesses the consequences of immigration for natives' unemployment in OECD countries and
investigates the role played by product and labour market policies in the economy's adjustment to
immigration inflows. The estimations, combining a skill-level and an aggregate approach using data for
males, cover eighteen OECD countries over the period 1984-2003. While no significant long-run impact is
found, an increase in the share of immigrants in the labour force is estimated to raise temporarily natives'
unemployment, over a period of approximately five to ten years. Anticompetitive product market
regulations are found to increase both the magnitude and the persistence of this impact, while more
stringent employment protection legislation magnifies its persistence, and a higher average replacement
rate of unemployment benefits increases its magnitude.
