Migration into the EU: Stocktaking of Recent Developments and Macroeconomic Implications
IMF Working Papers, September 27, 2024
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- Migration into the EU: Stocktaking of Recent Developments and Macroeconomic Implications
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Bibliographic details
- Authors: Francesca Caselli, Huidan Huidan Lin, Frederik G Toscani, Jiaxiong Yao
- Published: September 27, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400289552.001
Overview
- Immigration into the European Union (EU) reached a historical high in 2022 and stayed significantly above pre-pandemic levels in 2023, against the backdrop of the war in Ukraine.
- Recent migration has helped accommodate strong labor demand while unemployment of EU citizens remained at historical lows.
- Ukrainian refugees appear to have been absorbed into the labor market faster than previous waves of refugees in many countries.
Key findings and statistics
- Around two-thirds of jobs created between 2019 and 2023 were filled by non-EU citizens.
- The stronger-than-expected net migration over 2020-23 into the euro area was of around 2 million workers.
- This net migration is estimated to push up potential output by around 0.5 percent by 2030—even if immigrants are assumed to be 20 percent less productive than natives.
- The Report length: 44 pages.
- Series/issue identification: Working Paper No. 2024/211; Issue 211.
- DOI: https://doi.org/10.5089/9798400289552.001
- ISBN: 9798400289552
- ISSN: 1018-5941
Macroeconomic implications and scenarios
- Labor market absorption: Large recent inflows supported labor demand; Ukrainian refugees in particular had faster labor market integration in many countries compared with previous refugee waves.
- Potential output projection: Net migration of around 2 million workers over 2020-23 is estimated to increase euro area potential output by around 0.5 percent by 2030.
- Productivity assumption scenario: The 0.5 percent potential output increase is estimated under the assumption that immigrants are 20 percent less productive than natives.
- Demographic outlook: Immigration plays an important role in attenuating the effects of Europe’s challenging demographic outlook.
Fiscal and public services impacts
- Initial fiscal costs were incurred as a result of the large inflow.
- Likely congestion occurred in local public services, such as schooling, in areas receiving large numbers of migrants.
Policy recommendations
- Continue efforts to integrate migrants into the labor force to sustain the positive macroeconomic contribution.
- Ensure that the supply of public services and amenities, including at the local level, keeps up with population increases to mitigate congestion and fiscal pressures.
Source: Migration into the EU: Stocktaking of Recent Developments and Macroeconomic Implications, Francesca Caselli, Huidan Huidan Lin, Frederik G Toscani, Jiaxiong Yao, September 27, 2024.
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