Should Germany Have Built a New Wall? Macroeconomic Lessons from the 2015-18 Refugee Wave

Christopher Busch, Dirk Krueger, Alexander Ludwig, Irina Popova and Zainab Iftikhar

No 26973, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In 2015-2016 Germany experienced a wave of predominantly low-skilled refugee immigration. We evaluate its macroeconomic and distributional effects using a quantitative overlapping generations model calibrated using German micro data to replicate education and productivity differentials between foreign born and native workers. Workers are modelled as imperfect substitutes in aggregate production leading to endogenous wage differentials. We simulate the dynamic effects of this refugee wave, with specific focus on the welfare impact on low skilled natives. Our results indicate that the small losses this group suffers can be compensated by welfare gains of other parts of the native population.

JEL-codes: E20 F22 H55 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-dge and nep-mac
Note: AG EFG LS PE
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Citations: View citations in EconPapers (17)

Published as Christopher Busch & Dirk Krueger & Alexander Ludwig & Irina Popova & Zainab Iftikhar, 2020. "Should Germany Have Built a New Wall? Macroeconomic Lessons from the 2015-18 Refugee Wave," Journal of Monetary Economics, .

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Journal Article: Should Germany have built a new wall? Macroeconomic lessons from the 2015-18 refugee wave (2020)
Working Paper: Should Germany Have Built a New Wall? Macroeconomic Lessons from the 2015-18 Refugee Wave (2020)
Working Paper: Should Germany Have Built a New Wall? Macroeconomic Lessons from the 2015-18 Refugee Wave (2020)
Working Paper: Should Germany Have Built a New Wall? Macroeconomic Lessons from the 2015-18 Refugee Wave (2020)
Working Paper: Should Germany Have Built a New Wall?Macroeconomic Lessons from the 2015-18 Refugee Wave (2020)
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