## Malta: 2020 Selected Issues

_IMF Staff Country Reports, April 10, 2020_

## Source details

**Canonical URL:** [Malta: 2020 Selected Issues](https://www.imf.org/en/publications/cr/issues/2020/04/09/malta-2020-selected-issues-49321)

## Other formats

- [Markdown version](/en/publications/cr/issues/2020/04/09/malta-2020-selected-issues-49321/index.md)
- [Structured JSON version](/en/publications/cr/issues/2020/04/09/malta-2020-selected-issues-49321/index.json)
- [Bundle manifest](/en/publications/cr/issues/2020/04/09/malta-2020-selected-issues-49321/bundle-manifest.json)

## Bibliographic details
- Published: April 10, 2020
- Series: IMF Staff Country Reports

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### Executive summary and main findings
- The Selected Issues paper analyses immigration and the labor market in Malta.
- Immigration has been positive for Malta, helping boost growth, employment, productivity and incomes.
- The increased availability of foreign labor has helped contain wage inflation (and hence probably also price inflation) in recent years, contributing to maintain competitiveness in the face of a booming economy.
- The results suggest that foreign workers have helped contain aggregate wage inflation.

### Empirical approach and drivers of nominal wage growth
- Baseline regression regressors:
  - the headline unemployment rate
  - lagged core inflation
  - labor productivity growth
  - the share of foreign workers in total employment
  - the first and fourth lags of the dependent variable
- Results across some selected models suggest that foreign labor has helped contain wage inflation in recent years.
- A decomposition analysis is conducted to identify the drivers of nominal wage growth and to calculate the contributions of each of the independent variables included in the regressions.

### Policy-relevant implications (implied by findings)
- Maintaining sufficient availability of foreign labor can help contain aggregate wage inflation and support competitiveness amid strong economic expansion.
- Monitoring the share of foreign workers in total employment is important for understanding wage dynamics and inflationary pressures.
- Policies that consider interactions among unemployment, core inflation momentum, productivity growth, and foreign labor share can improve wage-inflation outlook assessments.

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## Content in this bundle

- **Malta: 2020 Selected Issues; IMF Country Report No. 99; March 25, 2020**
  - [Malta: 2020 Selected Issues; IMF Country Report No. 99; March 25, 2020 (Markdown version)](/-/media/files/publications/cr/2020/english/1mltea2020002.pdf.md){rel="alternate" type="text/markdown"}
  - [Malta: 2020 Selected Issues; IMF Country Report No. 99; March 25, 2020 (PDF)](/-/media/files/publications/cr/2020/english/1mltea2020002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2020/04/09/malta-2020-selected-issues-49321_