Immigration, Terrorism, and the Economy Jomon A. Paul and Aniruddha Bagchi
Coles Research Symposium on Homeland Security Special Issue, SIFALL21-04, October 2021
Overview This paper looks at the interaction between terrorism and the quality of life of immigrants in Organisation for Economic Co-operation and Development (OECD) countries as measured by their foreign-born unemployment rates and globalization levels, GDP per capita, and exports-to-GDP ratio. We find strong evidence that domestic terrorism adversely affects GDP per capita. The magnitude of this effect is substantial: at the sample mean, a one-standard-deviation increase in the number of domestic incidents decreases GDP per capita between 5.7% and 7.8%, depending on the specification used. We also find strong evidence that domestic terrorism increases the exports-to-GDP ratio, but transnational terrorism tends to decrease it. These results contradict previous research positing that primarily transnational terrorism affects these economic indicators. With either type of terrorism, we find an increase in the foreign-born unemployment rate decreases GDP per capita, and with domestic terrorism, it increases the export-to-GDP ratio.
28 | Coles Research Symposium
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