The impact of immigration on youth employment

This article provides an empirical investigation of the impact of immigration on native Japanese youth unemployment. The Japanese Population Censuses from 1990 through 2010, occurring once every 5 years, provide the data for analysis. From the raw census numbers, I created a panel data set for each of Japan's 47 prefectures. The use of panel data helps to control the heterogeneity of the prefectural data. This study also solved the endogeneity problem of the ratio of immigrants to native population, using an instrumental variable estimation for panel data model. The results of this study show that immigration inflows increase the ratio of native youth unemployment. Additionally, immigration inflows also increase the ratio of native youth non-labor force. These results imply that foreign employment could substitute for youth employment between 1990 and 2010 in Japan.