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Wages and Income Impacts of a Liberal Migration Policy: An Experimental Study

Author

Listed:
  • Miťková Veronika

    (Comenius University in Bratislava, Faculty of Social and Economic Sciences, Mlynské luhy 4, 820 05 Bratislava, Slovakia)

  • Kralova Sona

    (Comenius University in Bratislava, Faculty of Social and Economic Sciences, Mlynské luhy 4, 820 05 Bratislava, Slovakia)

Abstract

This article investigates the impact of a liberal migration policy that increases labour quotas by 5% on wages and income of residents, native migrants, and new migrants. The article focuses on the impact of migration in 21 areas, with particular attention given to Slovakia and Germany. It is based on data collected from the Global Trade Analysis Project database and the experimental design by Walmsley, Ahmed, and Parsons, with adjustments to capture current global migration flows. The findings indicate that the immigration of new unskilled workers negatively impacts the real wages of unskilled residents, decreasing them by almost 3%, while the arrival of skilled workers increases them by 0.73%. Similarly, the real wages of skilled residents decrease by 2.62% due to the arrival of new skilled migrants, while unskilled migration results in its increase by 0.53%. These findings can aid policymakers in developing policies that maximize the benefits of migration. This research provides new insights into the wage effects of migration in different areas, focusing on Germany and Slovakia.

Suggested Citation

  • Miťková Veronika & Kralova Sona, 2023. "Wages and Income Impacts of a Liberal Migration Policy: An Experimental Study," Naše gospodarstvo/Our economy, Sciendo, vol. 69(4), pages 38-50, December.
    • Handle: RePEc:vrs:ngooec:v:69:y:2023:i:4:p:38-50:n:3
    DOI: 10.2478/ngoe-2023-0022
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    References listed on IDEAS

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    1. Terrie L. Walmsley & L. Alan Winters, 2005. "Relaxing the Restrictions on the Temporary Movement of Natural Persons: A Simulation Analysis," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 20, pages 688-726.
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    Keywords

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    JEL classification:

    • 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
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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