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Should Germany have built a new wall? Macroeconomic lessons from the 2015-18 refugee wave

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  • Busch, Christopher
  • Krueger, Dirk
  • Ludwig, Alexander
  • Popova, Irina
  • Iftikhar, Zainab

Abstract

In 2015–2016 Germany experienced a wave of predominantly low-skilled refugee immigration. We evaluate its macroeconomic and distributional effects using a quantitative overlapping generations model calibrated using German micro data to replicate education and productivity differentials between foreign born and native workers. Workers are modelled as imperfect substitutes in aggregate production leading to endogenous wage differentials. We simulate the dynamic effects of this refugee wave, with specific focus on the welfare impact on low skilled natives. Our results indicate that the small losses this group suffers can be compensated by welfare gains of other parts of the native population.

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  • Busch, Christopher & Krueger, Dirk & Ludwig, Alexander & Popova, Irina & Iftikhar, Zainab, 2020. "Should Germany have built a new wall? Macroeconomic lessons from the 2015-18 refugee wave," Journal of Monetary Economics, Elsevier, vol. 113(C), pages 28-55.
  • Handle: RePEc:eee:moneco:v:113:y:2020:i:c:p:28-55
    DOI: 10.1016/j.jmoneco.2020.04.004
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Should Germany Have Built a New Wall? Macroeconomic Lessons from the 2015-18 Refugee Wave
      by Christian Zimmermann in NEP-DGE blog on 2020-04-13 04:09:32

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    Cited by:

    1. Joan Llull, 2020. "Immigration and Gender Differences in the Labor Market," Working Papers 1217, Barcelona Graduate School of Economics.
    2. Mark Colas & Dominik Sachs, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," Opportunity and Inclusive Growth Institute Working Papers 38, Federal Reserve Bank of Minneapolis.
    3. Mark Colas & Dominik Sachs, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," CESifo Working Paper Series 8604, CESifo.

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    More about this item

    Keywords

    Immigration; Refugees; Overlapping generations; Demographic change;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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