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The macroeconomics of immigration

Author

Listed:
  • Kiguchi, Takehiro
  • Mountford, Andrew

Abstract

Immigration has been a significant part of US population growth over recent decades, with the number of ``foreign born to non-US nationals" rising from approximately 10 million in 1970 to nearly 40 million or 12.9% of the US total population in 2010. In this paper, using a VAR with sign restriction identification, we find that unexpected increases in the working population lead to temporary reductions in GDP per capita and consumption per capita as would be predicted by the standard neoclassical growth model. However they do not lead to increases in non-residential investment or short run decreases in real wages as would also be predicted. The paper shows how a neoclassical growth model with a CES production function where migrant labor and capital are complements to skilled domestic labor and substitutes to each other can produce responses closer to those in the VAR. The paper thus provide support for the microeconometric studies on the impacts of immigration which found that immigrant labor is complementary to, rather than a substitute for, most native labor.

Suggested Citation

  • Kiguchi, Takehiro & Mountford, Andrew, 2013. "The macroeconomics of immigration," MPRA Paper 45517, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:45517
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    File URL: https://mpra.ub.uni-muenchen.de/45517/1/MPRA_paper_45517.pdf
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    References listed on IDEAS

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    7. Christian Dustmann & Tommaso Frattini & Ian P. Preston, 2013. "The Effect of Immigration along the Distribution of Wages," Review of Economic Studies, Oxford University Press, vol. 80(1), pages 145-173.
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    Citations

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    Cited by:

    1. Hippolyte d'Albis & Ekrame Boubtane & Dramane Coulibaly, 2016. "Immigration Policy and Macroeconomic Performance in France," Annals of Economics and Statistics, GENES, issue 121-122, pages 279-308.
    2. Weber, Enzo & Weigand, Roland, 2016. "Identifying macroeconomic effects of refugee migration to Germany," IAB Discussion Paper 201620, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Francesco Furlanetto & Ørjan Robstad, 2016. "Immigration and the macroeconomy: some new empirical evidence," Working Paper 2016/18, Norges Bank.
    4. Hippolyte D'Albis & Dramane Coulibaly & Ekrame Boubtane, 2017. "International Migration and Regional Housing Markets: Evidence from France," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01469758, HAL.
    5. repec:hal:journl:halshs-01162441 is not listed on IDEAS
    6. repec:hal:wpaper:halshs-01135389 is not listed on IDEAS

    More about this item

    Keywords

    Macroeconomics; Immigration;

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • F2 - International Economics - - International Factor Movements and International Business

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