Do cross-border workers cause unemployment in the host country? The case of Switzerland

Switzerland’s labour market traditionally accommodates many cross-border workers: their number is currently above 300,000, corresponding to almost 7% of the workforce. Social acceptance of such workers has however deteriorated over the last years, and questions arise over their potential adverse impacts on the local labour market. Using quarterly data over 1996-2017, we investigate the claim that border workers create unemployment among the local labour force, conducting both time-series analyses at the country-level and longitudinal analyses at the canton-level. Our findings indicate that causality runs mainly from unemployment to border workers, the latter being repelled when unemployment increases. The opposite effect, from border workers to unemployment appears to be weaker or even non-existent.