IDEAS home Printed from https://ideas.repec.org/p/zbw/glodps/757.html
   My bibliography  Save this paper

Europe's migration experience and its effects on economic inequality

Author

Listed:
  • Guzi, Martin
  • Kahanec, Martin
  • Ulceluse, Magdalena M.

Abstract

This chapter provides the historical context for the past half-century in Europe focusing specifically on the link between migration and economic development and inequality. The literature review suggests that there are several channels through which migration affects economic inequality between countries in one or the other direction. The net effects are an open empirical question and are likely to depend on the economic, demographic and institutional and policy contexts; sources, types and selectivity of migration, as well as responses of the receiving societies as well as migrants themselves. We undertake an empirical analysis and find that immigration has contributed to reducing inequality within the 25 EU countries over the 2003-2017 period. As the EU attracted relatively highly qualified immigrants throughout this period, our results are consistent with the ameliorating effect of skilled migration on within-country inequality, as predicted by theory.

Suggested Citation

  • Guzi, Martin & Kahanec, Martin & Ulceluse, Magdalena M., 2021. "Europe's migration experience and its effects on economic inequality," GLO Discussion Paper Series 757, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:757
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/228590/1/GLO-DP-0757.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gianmarco I. P. Ottaviano & Giovanni Peri & Greg C. Wright, 2021. "Immigration, Offshoring, and American Jobs," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 10, pages 291-326, World Scientific Publishing Co. Pte. Ltd..
    2. Gianmarco I. P. Ottaviano & Giovanni Peri, 2021. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 9, pages 245-290, World Scientific Publishing Co. Pte. Ltd..
    3. David Card, 1990. "The Impact of the Mariel Boatlift on the Miami Labor Market," ILR Review, Cornell University, ILR School, vol. 43(2), pages 245-257, January.
    4. Guzi, Martin & Kahanec, Martin, 2015. "Socioeconomic Cleavages between Workers from New Member States and Host-country Labour Forces in the EU during the Great Recession," MPRA Paper 74978, University Library of Munich, Germany.
    5. Alabrese, Eleonora & Becker, Sascha O. & Fetzer, Thiemo & Novy, Dennis, 2019. "Who voted for Brexit? Individual and regional data combined," European Journal of Political Economy, Elsevier, vol. 56(C), pages 132-150.
    6. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 3, pages 81-115 World Scientific Publishing Co. Pte. Ltd..
    7. Cristina Cattaneo & Carlo V. Fiorio & Giovanni Peri, 2015. "What Happens to the Careers of European Workers When Immigrants “Take Their Jobs†?," Journal of Human Resources, University of Wisconsin Press, vol. 50(3), pages 655-693.
    8. David Card, 2009. "Immigration and Inequality," American Economic Review, American Economic Association, vol. 99(2), pages 1-21, May.
    9. Sanderson, Eleanor & Windmeijer, Frank, 2016. "A weak instrument F-test in linear IV models with multiple endogenous variables," Journal of Econometrics, Elsevier, vol. 190(2), pages 212-221.
    10. Ralph Chami & Connel Fullenkamp & Samir Jahjah, 2005. "Are Immigrant Remittance Flows a Source of Capital for Development?," IMF Staff Papers, Palgrave Macmillan, vol. 52(1), pages 55-81, April.
    11. Kahanec, Martin & Pytlikova, Mariola & Zimmermann, Klaus F., 2014. "The Free Movement of Workers in an Enlarged European Union: Institutional Underpinnings of Economic Adjustment," IZA Discussion Papers 8456, Institute of Labor Economics (IZA).
    12. George J. Borjas, 2021. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 2, pages 3-29, World Scientific Publishing Co. Pte. Ltd..
    13. Maurice Kugler & Hillel Rapoport, 2005. "Skilled Emigration, Business Networks and Foreign Direct Investment," CESifo Working Paper Series 1455, CESifo.
    14. Anzelika Zaiceva, 2014. "Post-enlargement emigration and new EU members' labor markets," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-40, August.
    15. World Bank, 2005. "Global Economic Prospects 2006 : Economic Implications of Remittances and Migration," World Bank Publications - Books, The World Bank Group, number 7306.
    16. Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-529, October.
    17. Arnorsson, Agust & Zoega, Gylfi, 2018. "On the causes of Brexit," European Journal of Political Economy, Elsevier, vol. 55(C), pages 301-323.
    18. Sascha O Becker & Thiemo Fetzer & Dennis Novy, 2017. "Who voted for Brexit? A comprehensive district-level analysis," Economic Policy, CEPR;CES;MSH, vol. 32(92), pages 601-650.
    19. Giovanni Peri, 2014. "Do immigrant workers depress the wages of native workers?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-42, May.
    20. Guzi, Martin & Kahanec, Martin, 2018. "Income Inequality and the Size of Government: A Causal Analysis," IZA Discussion Papers 12015, Institute of Labor Economics (IZA).
    21. Silvia Avram & Horacio Levy & Holly Sutherland, 2014. "Income redistribution in the European Union," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-29, December.
    22. World Bank, 2006. "World Development Indicators 2006," World Bank Publications - Books, The World Bank Group, number 8151.
    23. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    24. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    25. Martin Guzi & Martin Kahanec & Lucia Mýtna Kureková, 2018. "How Immigration Grease Is Affected by Economic, Institutional, and Policy Contexts: Evidence from EU Labor Markets," Kyklos, Wiley Blackwell, vol. 71(2), pages 213-243, May.
    26. Dustmann, Christian & Fadlon, Itzhak & Weiss, Yoram, 2011. "Return migration, human capital accumulation and the brain drain," Journal of Development Economics, Elsevier, vol. 95(1), pages 58-67, May.
    27. Becker, Sascha O. & Fetzer, Thiemo & Novy, Dennis, 2022. "Who Voted for Brexit? A Comprehensive District-Level Analysis," CEPR Discussion Papers 11954, C.E.P.R. Discussion Papers.
    28. Stark, Oded, 2004. "Rethinking the Brain Drain," World Development, Elsevier, vol. 32(1), pages 15-22, January.
    29. Martin Kahanec & Martin Guzi, 2017. "How immigrants helped EU labor markets to adjust during the Great Recession," International Journal of Manpower, Emerald Group Publishing, vol. 38(7), pages 996-1015, October.
    30. George J. Borjas, 2021. "The Labor Demand Curve Is Downward Sloping: Reexamining The Impact Of Immigration On The Labor Market," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 9, pages 235-274, World Scientific Publishing Co. Pte. Ltd..
    31. Mckenzie, David & Rapoport, Hillel, 2007. "Network effects and the dynamics of migration and inequality: Theory and evidence from Mexico," Journal of Development Economics, Elsevier, vol. 84(1), pages 1-24, September.
    32. Devesh Kapur & John McHale, 2009. "International migration and the world income distribution," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(8), pages 1102-1110.
    33. Zimmermann, Klaus F. (ed.), 2005. "European Migration: What Do We Know?," OUP Catalogue, Oxford University Press, number 9780199257355, November.
    34. Catrinescu, Natalia & Leon-Ledesma, Miguel & Piracha, Matloob & Quillin, Bryce, 2009. "Remittances, Institutions, and Economic Growth," World Development, Elsevier, vol. 37(1), pages 81-92, January.
    35. Amuedo-Dorantes, Catalina & de la Rica, Sara, 2011. "Complements or substitutes? Task specialization by gender and nativity in Spain," Labour Economics, Elsevier, vol. 18(5), pages 697-707, October.
    36. Docquier, Frédéric, 2006. "Brain Drain and Inequality Across Nations," IZA Discussion Papers 2440, Institute of Labor Economics (IZA).
    37. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
    38. Ça?lar Özden & Maurice Schiff, 2006. "International Migration, Remittances, and the Brain Drain," World Bank Publications - Books, The World Bank Group, number 6929.
    39. Adams, Richard H, Jr, 1989. "Worker Remittances and Inequality in Rural Egypt," Economic Development and Cultural Change, University of Chicago Press, vol. 38(1), pages 45-71, October.
    40. Sascha Becker & Thiemo Fetzer & Dennis Novy & Sascha O. Becker, 2017. "Who Voted for Brexit?," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 15(04), pages 03-05, December.
    41. Martin Kahanec & Klaus F. Zimmermann (ed.), 2016. "Labor Migration, EU Enlargement, and the Great Recession," Springer Books, Springer, number 978-3-662-45320-9, January.
    42. Chiswick, Barry R, 1978. "The Effect of Americanization on the Earnings of Foreign-born Men," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 897-921, October.
    43. Anzelika Zaiceva & Klaus F. Zimmermann, 2008. "Scale, diversity, and determinants of labour migration in Europe," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 428-452, Autumn.
    44. Thanh Le, 2009. "Trade, Remittances, Institutions, and Economic Growth," International Economic Journal, Taylor & Francis Journals, vol. 23(3), pages 391-408.
    45. Guzi, Martin & Kahanec, Martin & Kureková, Lucia Mýtna, 2015. "What Explains Immigrant-Native Gaps in European Labor Markets: The Role of Institutions," IZA Discussion Papers 8847, Institute of Labor Economics (IZA).
    46. Chiswick, Carmel U, 1989. "The Impact of Immigration on the Human Capital of Natives," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 464-486, October.
    47. Mountford, Andrew, 1997. "Can a brain drain be good for growth in the source economy?," Journal of Development Economics, Elsevier, vol. 53(2), pages 287-303, August.
    48. Giovanni Peri, 2007. "Immigrants' Complementarities and Native Wages: Evidence from California," NBER Working Papers 12956, National Bureau of Economic Research, Inc.
    49. Amelie F. Constant, 2014. "Do migrants take the jobs of native workers?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-10, May.
    50. Christian Dustmann & Tommaso Frattini & Anna Rosso, 2015. "The Effect of Emigration from Poland on Polish Wages," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 522-564, April.
    51. Lars Højsgaard Andersen & Christian Dustmann & Rasmus Landersø, 2019. "Lowering Welfare Benefits: Intended and Unintended Consequences for Migrants and their Families," CReAM Discussion Paper Series 1905, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    52. Giovanni Peri & Chad Sparber, 2016. "Task Specialization, Immigration, and Wages," World Scientific Book Chapters, in: The Economics of International Migration, chapter 3, pages 81-115, World Scientific Publishing Co. Pte. Ltd..
    53. Martin Kahanec & Klaus Zimmermann, 2014. "How skilled immigration may improve economic equality," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 3(1), pages 1-13, December.
    54. Benjamin Elsner, 2013. "Does emigration benefit the stayers? Evidence from EU enlargement," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(2), pages 531-553, April.
    55. repec:iza:izawol:journl:y:2014:p:40 is not listed on IDEAS
    56. repec:iza:izawol:journl:y:2014:p:10 is not listed on IDEAS
    57. Martin Kahanec & Klaus F. Zimmermann (ed.), 2010. "EU Labor Markets After Post-Enlargement Migration," Springer Books, Springer, number 978-3-642-02242-5, January.
    58. Barry R. Chiswick, 2005. "The Economics of Immigration," Books, Edward Elgar Publishing, number 3160.
    59. repec:iza:izawol:journl:y:2014:p:42 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Polizzi, Antonino & Struffolino, Emanuela & Van Winkle, Zachary, 2022. "Family demographic processes and in-work poverty: A systematic review," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hatton, Timothy J., 2014. "The economics of international migration: A short history of the debate," Labour Economics, Elsevier, vol. 30(C), pages 43-50.
    2. Tomasz Serwach, 2022. "The European Union and within-country income inequalities. The case of the New Member States," Working Papers hal-03548416, HAL.
    3. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    4. Jens Ruhose, 2015. "Microeconometric Analyses on Economic Consequences of Selective Migration," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    5. Chletsos Michael & Roupakias Stelios, 2019. "Do Immigrants Compete with Natives in the Greek Labour Market? Evidence from the Skill-Cell Approach before and during the Great Recession," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-30, April.
    6. Hammer, Luisa & Hertweck, Matthias S., 2022. "EU enlargement and (temporary) migration: Effects on labour market outcomes in Germany," Discussion Papers 02/2022, Deutsche Bundesbank.
    7. Randall Akee & Maggie R. Jones, 2019. "Immigrants’ Earnings Growth and Return Migration from the U.S.: Examining their Determinants using Linked Survey and Administrative Data," NBER Working Papers 25639, National Bureau of Economic Research, Inc.
    8. Francesco D’Amuri & Gianmarco I.P. Ottaviano & Giovanni Peri, 2021. "The labor market impact of immigration in Western Germany in the 1990s," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 8, pages 223-243, World Scientific Publishing Co. Pte. Ltd..
    9. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    10. Martin Kahanec & Mariola Pytliková, 2017. "The economic impact of east–west migration on the European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(3), pages 407-434, August.
    11. Fernando A. Lozano & Michael D. Steinberger, 2012. "Empirical Methods in the Economics of International Immigration," Chapters, in: Carlos Vargas-Silva (ed.), Handbook of Research Methods in Migration, chapter 8, Edward Elgar Publishing.
    12. de la Rica, Sara & Glitz, Albrecht & Ortega, Francesc, 2013. "Immigration in Europe: Trends, Policies and Empirical Evidence," IZA Discussion Papers 7778, Institute of Labor Economics (IZA).
    13. Ortega, Javier & Verdugo, Gregory, 2014. "The impact of immigration on the French labor market: Why so different?," Labour Economics, Elsevier, vol. 29(C), pages 14-27.
    14. Lewis, Ethan & Peri, Giovanni, 2015. "Immigration and the Economy of Cities and Regions," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 625-685, Elsevier.
    15. Stelios Roupakias & Michael Chletsos, 2020. "Immigration and far-right voting: evidence from Greece," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(3), pages 591-617, December.
    16. Michael Seeborg & Ene Ikpebe, 2021. "The Effect of Undergraduate Major Choices on the Earnings of Sub-Saharan African Immigrant and Native-Born College Graduates," The American Economist, Sage Publications, vol. 66(2), pages 222-240, October.
    17. Battiston, Diego, 2013. "The impact of immigration on the labour market: Evidence from 20 years of cross-border migration to Argentina," MPRA Paper 52424, University Library of Munich, Germany.
    18. Giuntella, Osea & Mazzonna, Fabrizio, 2015. "Do immigrants improve the health of natives?," Journal of Health Economics, Elsevier, vol. 43(C), pages 140-153.
    19. Edo, Anthony & Rapoport, Hillel, 2019. "Minimum wages and the labor market effects of immigration," Labour Economics, Elsevier, vol. 61(C).
    20. Moreno-Galbis, Eva & Tritah, Ahmed, 2016. "The effects of immigration in frictional labor markets: Theory and empirical evidence from EU countries," European Economic Review, Elsevier, vol. 84(C), pages 76-98.

    More about this item

    Keywords

    immigration; inequality; labour mobility; income distribution; EU enlargement;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D60 - Microeconomics - - Welfare Economics - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:glodps:757. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/glabode.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/glabode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.