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International Migration to Germany: A CGE-Analysis of Labour Market Impact

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  • Michael KOHLHAAS
  • Herbert BRÜCKER

Abstract

Although it is widely accepted that additional migration is needed to mitigate ageing, among the present Member States of the European Union (EU) concerns are widespread that free movement of labour for the accession countries will result in falling wages and increasing unemployment. This paper analyses the impact of migration on factor income and employment on basis of a computable general equilibrium model. The analysis is undertaken with a dynamic multi-regional CGE model of Germany and the rest of EU15. This model, called LEAN (Welsch, 1996), allows to represent labour markets with various degrees of wage rigidities in an open-economy framework. The focus is placed on different scenarios with regard to the scale of migration and the qualification of migrants. Simulation results are evaluated with respect to economic growth, employment, factor income, and the implicit distributive effects. The results show that even substantial levels of migration need not overstrain the adaptive capacity of the German labour market. A change of the structure of the qualification of migrants may pose more of a challenge. A higher share of highly qualified migrants could strain this relatively small labour market segment. A higher share of low-skilled workers could cause higher unemployment because this labour market segment is more rigid and additionally reduce the average productivity and GDP.
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  • Michael KOHLHAAS & Herbert BRÜCKER, 2010. "International Migration to Germany: A CGE-Analysis of Labour Market Impact," EcoMod2004 330600078, EcoMod.
    • Handle: RePEc:ekd:003306:330600078
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    References listed on IDEAS

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    1. Konstantinos Pouliakas & Deborah Roberts & Eudokia Balamou & Dimitris Psaltopoulos, 2014. "Modelling the Effects of Immigration on Regional Economic Performance and Wage Distribution: A Computable General Equilibrium (CGE) Analysis of Three European Union Regions," Regional Studies, Taylor & Francis Journals, vol. 48(2), pages 318-338, February.
    2. Filipski, Mateusz & Aboudrare, Abdellah & Lybbert, Travis J. & Taylor, J. Edward, 2015. "Spice Price Spikes: Simulating Gendered Impacts of a Saffron Boom and Bust in Rural Mexico," 2015 Conference, August 9-14, 2015, Milan, Italy 229066, International Association of Agricultural Economists.
    3. Pouliakas, Konstantinos & Roberts, Deborah & Balamou, Eudokia & Psaltopoulos, Dimitris, 2008. "Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions," MPRA Paper 14157, University Library of Munich, Germany.
    4. Liesbet Okkerse, 2008. "How To Measure Labour Market Effects Of Immigration: A Review," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 1-30, February.
    5. Filipski, Mateusz & Aboudrare, Abdellah & Lybbert, Travis J. & Taylor, J. Edward, 2017. "Spice Price Spikes: Simulating Impacts of Saffron Price Volatility in a Gendered Local Economy-Wide Model," World Development, Elsevier, vol. 91(C), pages 84-99.
    6. Filipski, Mateusz & Edward Taylor, J. & Msangi, Siwa, 2011. "Effects of Free Trade on Women and Immigrants: CAFTA and the Rural Dominican Republic," World Development, Elsevier, vol. 39(10), pages 1862-1877.

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