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Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions

Author

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  • Pouliakas, Konstantinos

    (European Centre for the Development of Vocational Training (Cedefop))

  • Roberts, Deborah

    (University of Aberdeen)

  • Balamou, Eudokia

    (University of Patras)

  • Psaltopoulos, Demetrios

    (University of Patras)

Abstract

The paper uses a regional Computable General Equilibrium (CGE) model to analyse the effects of immigration on three small remote EU regions located within Scotland, Greece and Latvia. Two migration scenarios are assessed. In the first, total labour supply is affected. In the second, the importance of migratory flows by differential labour skill types is investigated. The results indicate significant differences in the extent to which regional economies are affected by immigration. They also suggest that remote regions are highly vulnerable to the out-migration of skilled workers ('brain-drain') while the in-migration of unskilled workers leads to widening wage inequality.

Suggested Citation

  • Pouliakas, Konstantinos & Roberts, Deborah & Balamou, Eudokia & Psaltopoulos, Demetrios, 2009. "Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A CGE Analysis of Three EU Regions," IZA Discussion Papers 4648, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp4648
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    References listed on IDEAS

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    2. Andreas Hatzigeorgiou & Patrik Karpaty & Richard Kneller & Magnus Lodefalk, 2024. "Immigrant employment and the contract enforcement costs of offshoring," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 160(3), pages 953-981, August.
    3. Rusmawati Said & Kamarul Hidayah Abdul Hamid & Nursyazwani Mazlan, 2020. "How Does Immigration Affect Wages and the Unemployment Rate in Malaysia? A Computable General Equilibrium (CGE) Approach," Asian Social Science, Canadian Center of Science and Education, vol. 16(11), pages 100-100, November.
    4. Sorin Manole & Laura Panoiu & Adriana Paunescu, 2017. "Impact of Migration upon a Receiving Country’s Economic Development," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 19(46), pages 670-670, August.

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    More about this item

    Keywords

    regional economies; brain-drain; immigration; CGE; skills; wage inequality;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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