Modelling the Effects of Immigration on Regional Economic Performance and Wage Distribution: A Computable General Equilibrium (CGE) Analysis of Three European Union Regions

Konstantinos Pouliakas, Deborah Roberts, Eudokia Balamou and Demetrios Psaltopoulos

Regional Studies, 2014, vol. 48, issue 2, 318-338

Abstract: Pouliakas K., Roberts D., Balamou E. and Psaltopoulos D. Modelling the effects of immigration on regional economic performance and wage distribution: a computable general equilibrium (CGE) analysis of three European Union regions, Regional Studies . The paper uses a regional computable general equilibrium (CGE) model to analyse the effects of immigration on three small remote European Union regions located within Scotland (UK), Greece and Latvia. Two migration scenarios are assessed. In the first, total labour supply is affected. In the second, the importance of migratory flows by differential labour skill types is investigated. The results indicate significant differences in the extent to which regional economies are affected by immigration. They also suggest that remote regions are highly vulnerable to the out-migration of skilled workers ('brain-drain'), while the in-migration of unskilled workers leads to widening wage inequality.

Date: 2014
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DOI: 10.1080/00343404.2011.653332

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