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For immediate release: June 30, 2010

Recession Drives Migration Policy Changes, Says Dallas Fed’s Economic Letter

DALLAS—Reacting to rising unemployment rates during the Great Recession, numerous countries adopted policies aimed at keeping new migrants out and encouraging resident migrants to leave, according to the latest issue of the Federal Reserve Bank of Dallas’ Economic Letter.

In “Manning the Gates: Migration Policy in the Great Recession,” research officer and senior economist Pia Orrenius and research analyst Mike Nicholson say countries’ policy changes included tightening numerical limits and imposing categorical limits on immigrant inflows, as well as trimming lists of shortage occupations and changing eligible occupations for migrants.

Other changes included limiting migrants’ opportunity to adjust their legal status or renew work permits, tightening employers’ advertising requirements or labor market tests and boosting immigration enforcement, the authors state.

In the United States, banks receiving federal bailout funds in 2008 were discouraged from hiring foreign employees through the H1-B program for high-skilled specialty workers, according to the authors. In addition, a February 2010 executive order imposed stricter rules for employers using foreign-born farmworkers.

Some countries hit hard by the recession—notably Ireland, Spain and the U.K.— took measures to protect native workers, emphasizing the control of worker inflows from outside the European Union, Orrenius and Nicholson say.

Many countries, including Spain, Czech Republic and Japan, created policies offering incentives to foreign workers to return to their home countries, they note.

The immigration backlash could have its greatest effect after the recession ends, when a growing demand for labor could clash with the new policies, Orrenius and Nicholson conclude.


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