IMPACT OF IMMIGRATION ON LABOUR COST IN EU: IS THERE A THRESHOLD EFFECT?

In this study, the impacts of migration on labour costs are examined within the framework of structural approach by using nonlinear components of migration and labour cost 22 European Union member countries for the period 2000 – 2017. While labour cost is determined as dependent variable, the ratio of immigration to country population is determined as regime dependent regressor and threshold variable and panel threshold method is used in the study. The findings indicate that there is a single threshold level for the established model. In the first regime below the threshold value, it is determined that an increase in immigration reduces labour costs, and if the immigration exceeds the threshold value, it is concluded that the immigration has no effect on the labour costs.