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The costs and benefits of European immigration

Rainer Münz, Thomas Straubhaar, Florin Petru Vadean () and Nadia Vadean

No 3, HWWI Policy Reports from Hamburg Institute of International Economics (HWWI)

Abstract: In the early 21st century Europe is confronted with an ageing population, stagnating or even declining native populations, high unemployment and in the most key countries also with slow economic growth. At the same time Europe remains one of the prime destinations of international migration. Free movement of people is a means of creating an integrated Europe. Geographic mobility also helps on establishing a more efficient labour market, to the long-term benefit of workers, employers, taxpayers and EU Member States. Thus, our paper quantifies current migration patterns (see pp. 14-15); it recollects theoretical (see pp. 16-27) and empirical arguments (see pp. 28-47) on why immigration is so important, to what extent labour mobility allows individuals to improve their job prospects and employers to recruit people with adequate skills. The paper also discusses what kind of common European policies should be undertaken to optimise benefits of international migration. All our findings might not only avail understanding the economic impact of immigration. But they have policy implications for migrant receiving countries in Europe as well. The aim is to develop a better understanding of how the EU and its Member States could use availability and skills of today's and future immigrant populations in order to cope with economic and demographic challenges.

Date: 2006
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