The Macroeconomic Effects of Large Immigration Waves

By Philipp Engler, Margaux MacDonald, Roberto Piazza, Galen Sher

December 15, 2023

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Philipp Engler, Margaux MacDonald, Roberto Piazza, and Galen Sher. The Macroeconomic Effects of Large Immigration Waves, (USA: International Monetary Fund, 2023) accessed October 6, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We propose a novel approach to measure the dynamic macroeconomic effects of immigration on the destination country, combining the analysis of episodes of large immigration waves with instrumental variables techniques. We distinguish the impact of immigration shocks in OECD countries from that of refugee immigration in emerging and developing economies. In OECD, large immigration waves raise domestic output and productivity in both the short and the medium term, pointing to significant dynamic gains for the host economy. We find no evidence of negative effects on aggregate employment of the native-born population. In contrast, our analysis of large refugee flows into emerging and developing countries does not find clear evidence of macroeconomic effects on the host country, a conclusion in line with a growing body of evidence that refugee immigrants are at disadvantage compared to other type of immigrants.

Subject: Econometric analysis, Employment, Estimation techniques, Labor, Migration, Population and demographics, Production, Total factor productivity

Keywords: Dynamic gains, Employment, Estimation techniques, Immigration, Immigration episode, Immigration shock, Immigration wave, Middle East, Migration, Migration shock, OECD migration flow data, Productivity, Total factor productivity

Publication Details

Pages:

19
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2023/259
Stock No:

WPIEA2023259
ISBN:

9798400261794
ISSN:

1018-5941

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