Dynamic macroeconomic implications of immigration

Conny Olovsson, Karl Walentin and Andreas Westermark

Journal of Monetary Economics, 2025, vol. 151, issue C

Abstract: International immigration flows are large, volatile, and increasing. We document the dynamic implications of immigration, and account for the differential unemployment and labor force participation rates between immigrants and natives. To quantify the effects of immigration, we use Swedish population registry data and productivity estimates from a matched employer–employee dataset. A refugee (economic) immigration shock yields large initial negative (positive but delayed) effects on GDP per capita and employment rates, substantially larger than, but with the same sign as the corresponding steady state effects. This reflects the empirical fact that labor market integration is a gradual process over many years.

Keywords: Immigration; Refugees; Dynamics; Search and matching (search for similar items in EconPapers)
JEL-codes: J21 J31 J61 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:151:y:2025:i:c:s0304393225000182

DOI: 10.1016/j.jmoneco.2025.103747

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