Description:
Over the recent years Malta has experienced a remarkable increase in its labour force due to a large influx of immigrants and an unprecedented increase in the domestic participation. Driven by the observation of such a phenomenon, this paper aims at assessing the impact of foreign and domestic labour supply shocks on the Maltese economy by estimating a number of structural vector autoregressions (VARs) identified through sign restrictions. The VARs are estimated by using data over the 2004Q1- 2019Q2 period and the results point toward a relevant impact of the identified shocks on domestic production, wages and unemployment as well as on a number of other key variables, e.g., government revenue and expenditure, rents and measures of productivity.