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Impact of Migration on Income Levels in Advanced Economies

Author

Listed:
  • Florence Jaumotte
  • Ksenia Koloskova
  • Sweta Chaman Saxena

Abstract

The recent refugee surge has brought attention to the macro-critical policy issue of migration, including speculations that migration can be an unfavorable phenomenon for the receiving economies. A careful examination of the impact of migration on host economies is thus critical. Focusing on the economic impact, most of the academic discussion has centered on the effect of migration on labor markets and public finances. Much less is known about the long-term impact of immigration on the GDP per capita (or the standard of living) of host economies. This note makes three contributions to estimating this impact: it uses a restricted sample of advanced economies rather than a mixed sample of higher- and lower-income host countries, it examines whether the GDP per capita impact varies for different skill levels of migrants, and it goes beyond the aggregate impact of migration on GDP per capita to examine how broadly gains in this regard are shared across the population. In particular, it examines whether migration impacts the income levels of those both at the top and at the bottom of the earnings distribution, or whether gains are instead concentrated in a small group of high earners. It finds that immigration significantly increases GDP per capita in advanced economies, that both high- and lower-skilled migrants can raise labor productivity, and that an increase in the migrant share benefits the average income per capita of both the bottom 90 percent and the top 10 percent of earners, suggesting the gains from immigration are broadly shared.

Suggested Citation

  • Florence Jaumotte & Ksenia Koloskova & Sweta Chaman Saxena, 2016. "Impact of Migration on Income Levels in Advanced Economies," IMF Spillover Notes 16/08, International Monetary Fund.
  • Handle: RePEc:imf:imfson:16/08
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    Cited by:

    1. d'Artis Kancs & Patrizio Lecca, 2018. "Long‐term social, economic and fiscal effects of immigration into the EU: The role of the integration policy," The World Economy, Wiley Blackwell, vol. 41(10), pages 2599-2630, October.
    2. Campo, Francesco & Forte, Giuseppe & Portes, Jonathan, 2018. "The Impact of Migration on Productivity and Native-Born Workers' Training," IZA Discussion Papers 11833, Institute of Labor Economics (IZA).
    3. Michael Landesmann & Sandra M. Leitner, 2018. "Immigration and Innovation," wiiw Working Papers 158, The Vienna Institute for International Economic Studies, wiiw.
    4. Blaise Gnimassoun & C. John Anyanwu, 2018. "The Diaspora And Economic Development In Africa," EconomiX Working Papers 2018-16, University of Paris Nanterre, EconomiX.
    5. Blaise Gnimassoun & John Anyanwu, 2019. "Working Paper 308 - The Diaspora and Economic Development in Africa," Working Paper Series 2434, African Development Bank.
    6. Lisa Bagnoli & Antonio Estache, 2019. "Mentoring labor market integration of migrants: Policy insights from a survey of mentoring theory and practice," Working Papers ECARES 2019-15, ULB -- Universite Libre de Bruxelles.
    7. O’Connor, Kelsey J., 2019. "The effect of immigration on natives’ well-being in the European Union," GLO Discussion Paper Series 352, Global Labor Organization (GLO).
    8. Philip L. Martin, 2016. "Migration, Trade and Remittances: Low- and High-Skilled Workers," Remittances Review, Transnational Press London, UK, vol. 1(1), pages 39-52, October.

    More about this item

    Keywords

    Income; Labor productivity; Migration; Employment; GDP; advanced economies; migrant skill levels; regional migration; host economies; working-age population; old-age dependency ratio;

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