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The aggregate and redistributive effects of emigration

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  • Małgorzata Walerych

Abstract

The 2004 EU enlargement has triggered large and rapid migration movements from the new to the old member states. The scale of this outflow was unprecedented in the CEE history and its structure was also different from previous emigration waves as it was more heavily biased towards young and educated people. I exploit this post-accession emigration wave to study the aggregate and redistributive effects of emigration. Using a two-country general equilibrium model with heterogeneous agents and endogenous migration choice calibrated to Polish data, I show that emigration lowers output per capita and improves the international investment position of the source country. Changes in population structure resulting from population outflows affect the wage distribution between high-skilled and low-skilled workers, thereby increasing economic inequalities. Moreover, I find that lifting labour mobility barriers is beneficial not only for people who move abroad, but also for skilled never-migrants.

Suggested Citation

  • Małgorzata Walerych, 2021. "The aggregate and redistributive effects of emigration," KAE Working Papers 2021-066, Warsaw School of Economics, Collegium of Economic Analysis.
    • Handle: RePEc:sgh:kaewps:2021066
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    1. Sergii Kiiashko & Paweł Kopiec, 2022. "Labor Market Integration and Fiscal Competition," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(S1), pages 157-185, February.

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    More about this item

    Keywords

    migration; sending country; heterogenous agents; EU accession;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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