8. Conclusion
The increasing contribution of immigrants to the labor force is among the most important contemporaneous labor supply shocks facing European labor markets. To date, most of the literature has discussed the labor market consequences of such shocks using a standard neoclassical labor-supply labor-demand framework. However, this approach does not allow to introduce important differences in non-productive assets between immigrants and natives. We have shown in this paper that, once introduced into a frictional labor market, differences in host-country-specific assets between immigrants and natives can reverse the conclusions reached by the standard model: in the short run, immigrants improve the employment prospects of competing native workers. Thus, instead of crowding out natives, immigrants may instead crowd in natives in sectors and occupations to which they contribute. The employment creation effect has been found more important for new immigrants, for immigrants from non-EU15 countries, and for countries that display large differences in the unemployment benefit take-up rate between similar immigrants and natives. Overall, these results highlight that immigrants may lack host-country-specific assets, which explains their positive impact on natives' employment.