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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. Jaschke Philipp & Sulin Sardoschau & Marco Tabellini, 2021. "Scared Straight? Threat and Assimilation of Refugees in Germany," CReAM Discussion Paper Series 2136, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    2. Joan Llull, 2021. "Immigration and Gender Differences in the Labor Market," Journal of Human Capital, University of Chicago Press, vol. 15(1), pages 174-203.
    3. Michael A Clemens, 2022. "The economic and fiscal effects on the United States from reduced numbers of refugees and asylum seekers [Refugees without Assistance: English-language Attainment and Economic Outcomes in the Early," Oxford Review of Economic Policy, Oxford University Press, vol. 38(3), pages 449-486.
    4. 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.
    5. Florio, Erminia & Kharazi, Aicha, 2022. "Curtailment of Economic Activity and Labor Inequalities," GLO Discussion Paper Series 1166, Global Labor Organization (GLO).
    6. Michael A. Clemens, 2021. "The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates," CReAM Discussion Paper Series 2134, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    7. Mark Colas & Dominik Sachs, 2020. "The Indirect Fiscal Benefits of Low-Skilled Immigration," CESifo Working Paper Series 8604, CESifo.
    8. Olovsson, Conny & Walentin, Karl & Westermark, Andreas, 2021. "Dynamic Macroeconomic Implications of Immigration," Working Paper Series 405, Sveriges Riksbank (Central Bank of Sweden), revised 01 Oct 2022.

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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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