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Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighborhood Regions

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  • Vladimir Borgy
  • Xavier Chojnicki

Abstract

In this paper, we assess the demographic and economic consequences of migration in Europe and neighborhood countries using a multi-regions OLG model (INGENUE2). Our quantitative results shed some light on the long term consequences of migration on regions that are not at the same stage in the ageing process. Despite some improvement of their public pension system, it appears that a realistic migration scenario does not offset the effect of ageing in host regions; leaving room for pension reforms. The adverse economic consequences of emigration appear to be all the more important than the origin region is advanced in the ageing process. Finally, we consider and evaluate a policy of immigration in which the decline of the labor force in Western Europe is eschewed.

Suggested Citation

  • Vladimir Borgy & Xavier Chojnicki, 2009. "Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighborhood Regions," Economie Internationale, CEPII research center, issue 119, pages 115-153.
  • Handle: RePEc:cii:cepiei:2009-3te
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    File URL: http://www.cepii.fr/IE/rev119/ei119e.htm
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    References listed on IDEAS

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    1. Krueger, Dirk & Ludwig, Alexander, 2007. "On the consequences of demographic change for rates of returns to capital, and the distribution of wealth and welfare," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 49-87, January.
    2. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
    3. Hans Fehr & Sabine Jokisch & Laurence Kotlikoff, 2003. "The Developed World's Demographic Transition - The Roles of Capital Flows, Immigration, and Policy," NBER Working Papers 10096, National Bureau of Economic Research, Inc.
    4. Miles, David, 1999. "Modelling the Impact of Demographic Change upon the Economy," Economic Journal, Royal Economic Society, vol. 109(452), pages 1-36, January.
    5. Aglietta, Michel & Chateau, Jean & Fayolle, Jacky & Juillard, Michel & Le Cacheux, Jacques & Le Garrec, Gilles & Touze, Vincent, 2007. "Pension reforms in Europe: An investigation with a computable OLG world model," Economic Modelling, Elsevier, vol. 24(3), pages 481-505, May.
    6. Ray Barrell & John Fitzgerald & Rebecca Riley, 2010. "EU Enlargement and Migration: Assessing the Macroeconomic Impacts," Journal of Common Market Studies, Wiley Blackwell, vol. 48, pages 373-395, March.
    7. Juha Alho & vladimir Borgy, 2007. "Global Ageing and Macroeconomic Consequences of Demographic Uncertainty in a Multi-Regional Model," Working Papers 2007-09, CEPII research center.
    8. Michael Fertig, 2001. "The economic impact of EU-enlargement: assessing the migration potential," Empirical Economics, Springer, vol. 26(4), pages 707-720.
    9. Dora M Iakova, 2007. "The Macroeconomic Effects of Migration from the New European Union Member States to the United Kingdom," IMF Working Papers 07/61, International Monetary Fund.
    10. repec:nsr:niesrd:292 is not listed on IDEAS
    11. Hans Fehr & Sabine Jokisch & Laurence J. Kotlikoff, 2004. "The Role of Immigration in Dealing with the Developed World's Demographic Transition," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(3), pages 296-296, September.
    12. Börsch-Supan, Axel & Ludwig, Alexander & Winter, Joachim, 2004. "Aging, Pension Reform, and Capital Flows:," Sonderforschungsbereich 504 Publications 04-65, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
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    Cited by:

    1. Cécily Defoort & Carine Drapier, 2012. "Immigration and its dependence on the welfare system: the case of France," Working Papers hal-00995293, HAL.
    2. Peeters, Marga, 2011. "“Better Safe than Sorry” - Individual Risk-free Pension Schemes in the European Union - Macroeconomic Benefits, the Mobile Working Citizen’s Perspective and Why Nots," MPRA Paper 33571, University Library of Munich, Germany.
    3. Marga Peeters, 2012. "Better Safe than Sorry - Individual Risk-free Pension Schemes in the European Union," Contemporary Economics, University of Finance and Management in Warsaw, vol. 6(3), September.

    More about this item

    Keywords

    CGEM; migration; international capital flows; neighborhood policy;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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