The Macroeconomic Effects of Large Immigration Waves

Philipp Engler, Margaux MacDonald, Roberto Piazza and Galen Sher

No 2023/259, IMF Working Papers from International Monetary Fund

Abstract: We propose a novel approach to measure the dynamic macroeconomic effects of immigration on the destination country, combining the analysis of episodes of large immigration waves with instrumental variables techniques. We distinguish the impact of immigration shocks in OECD countries from that of refugee immigration in emerging and developing economies. In OECD, large immigration waves raise domestic output and productivity in both the short and the medium term, pointing to significant dynamic gains for the host economy. We find no evidence of negative effects on aggregate employment of the native-born population. In contrast, our analysis of large refugee flows into emerging and developing countries does not find clear evidence of macroeconomic effects on the host country, a conclusion in line with a growing body of evidence that refugee immigrants are at disadvantage compared to other type of immigrants.

Keywords: Immigration; productivity; dynamic gains; immigration wave; immigration shock; immigration episode; OECD migration flow data; migration shock; Migration; Employment; Total factor productivity; Estimation techniques; Middle East (search for similar items in EconPapers)
Pages: 19
Date: 2023-12-15
New Economics Papers: this item is included in nep-int, nep-mig and nep-ure
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