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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 1170, Working Papers from Barcelona Graduate School of Economics

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.

Keywords: Immigration; refugees; overlapping generations; demographic change (search for similar items in EconPapers)
JEL-codes: F22 E20 H55 (search for similar items in EconPapers)
Date: 2020-04
New Economics Papers: this item is included in nep-dge, nep-lab and nep-mac
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Working Paper: Should Germany Have Built a New Wall? Macroeconomic Lessons from the 2015-18 Refugee Wave (2020) Downloads
Working Paper: Should Germany Have Built a New Wall? Macroeconomic Lessons from the 2015-18 Refugee Wave (2020) Downloads
Working Paper: Should Germany Have Built a New Wall?Macroeconomic Lessons from the 2015-18 Refugee Wave (2020) Downloads
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