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The welfare effects of business-cycle-induced immigration

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  • Nikolaj Malchow-møller
  • Jan Rose Skaksen

Abstract

Despite the fact that migration flows have always been closely related to business cycles, the effects of immigration are typically analysed in models without economic fluctuations. In this paper, we find that the welfare consequences of business-cycle-induced immigration are very different from the consequences of permanent immigration in a static economy. Specifically, the welfare effects depend crucially on (1) the return rate of immigrants in downturns and (2) the costs of recruiting immigrants. This has important consequences for the optimal design of temporary immigration programmes to deal with labour shortages.

Suggested Citation

  • Nikolaj Malchow-møller & Jan Rose Skaksen, 2014. "The welfare effects of business-cycle-induced immigration," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(5), pages 682-709, August.
    • Handle: RePEc:taf:jitecd:v:23:y:2014:i:5:p:682-709
    DOI: 10.1080/09638199.2013.797008
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