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The Changing Structure of Immigration to the OECD: What Welfare Effects on Member Countries?

Author

Listed:
  • Michał Burzyński

    (University of Luxembourg)

  • Frédéric Docquier

    (Université Catholique de Louvain (Office D.232))

  • Hillel Rapoport

    (Université Paris 1 Panthéon-Sorbonne and CEPII)

Abstract

We investigate the welfare implications of two pre-crisis immigration waves (1991–2000 and 2001–2010) and of the post-crisis wave (2011–2015) for OECD native citizens. To do so, we develop a general equilibrium model that accounts for the main channels of transmission of immigration shocks – the employment and wage effects, the fiscal effect and the market size effect – and for the interactions between them. We parameterize our model for 20 selected OECD member states. We find that the three waves induce positive effects on the real income of natives; however, the size of these gains varies considerably across countries and across skill groups. In relative terms, the post-crisis wave induces smaller welfare gains compared to the previous ones. This is due to the changing origin mix of immigrants, which translates into lower levels of human capital and smaller fiscal gains. With a few exceptions, differences across cohorts explain a tiny fraction of the highly persistent, cross-country heterogeneity in the economic benefits from immigration.

Suggested Citation

  • Michał Burzyński & Frédéric Docquier & Hillel Rapoport, 2018. "The Changing Structure of Immigration to the OECD: What Welfare Effects on Member Countries?," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 66(3), pages 564-601, September.
  • Handle: RePEc:pal:imfecr:v:66:y:2018:i:3:d:10.1057_s41308-018-0059-3
    DOI: 10.1057/s41308-018-0059-3
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    1. Frédéric Docquier & Riccardo Turati & Jérôme Valette & Chrysovalantis Vasilakis, 2020. "Birthplace diversity and economic growth: evidence from the US states in the Post-World War II period [Cultural diversity and economic growth: evidence from the US during the age of mass migration]," Journal of Economic Geography, Oxford University Press, vol. 20(2), pages 321-354.
    2. Docquier, Frédéric & Kone, Zovanga L. & Mattoo, Aaditya & Ozden, Caglar, 2019. "Labor market effects of demographic shifts and migration in OECD countries," European Economic Review, Elsevier, vol. 113(C), pages 297-324.
    3. Ikhenaode, Bright Isaac, 2024. "Immigration, skill acquisition, and fiscal redistribution in a search equilibrium model," Macroeconomic Dynamics, Cambridge University Press, vol. 28(1), pages 1-31, January.
    4. Frédéric Docquier & Bright Isaac Ikhenaode & Hendrik Scheewel, 2022. "Immigration, welfare, and inequality: How much does the labor market specification matter?," Review of International Economics, Wiley Blackwell, vol. 30(5), pages 1315-1347, November.

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    More about this item

    Keywords

    Immigration; Welfare; Crisis; Inequality; General equilibrium;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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