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Does Immigration Grow the Pie? Asymmetric Evidence from Germany

Nicolo Maffei-Faccioli () and Eugenia Vella ()

No 2105, DEOS Working Papers from Athens University of Economics and Business

Abstract: We provide empirical evidence suggesting that net migration shocks can have substantial demand effects, potentially acting like positive Keynesian supply shocks. Using monthly administrative data (2006-2019) for Germany in a structural VAR, we show that the shocks stimulate vacancies, wages, house prices, consumption, investment, net exports, and output. Unemployment falls for natives (dominant jobcreation effect), driving a decline in total unemployment, while rising for foreigners (dominant job-competition effect). The geographic origin of migrants and the education level of residents matter crucially for the transmission. Overall, the evidence implies that the policy debate should focus on redistributive strategies between natives and foreigners.

Keywords: Migration; job creation; job competition; Keynesian supply shocks (search for similar items in EconPapers)
JEL-codes: C11 C32 E32 F22 (search for similar items in EconPapers)
Date: 2021-05-10
New Economics Papers: this item is included in nep-int, nep-mac, nep-mig, nep-ore and nep-ure
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