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The Changing Structure of Immigration to the OECD: What Welfare Effects on Member Countries?

Author

Listed:
  • Michal Burzynski

    (University of Luxembourg)

  • Fre´de´ric Docquier

    (Universite Catholique de Louvain)

  • Hillel Rapoport

    (Paris School of Economics)

Abstract
We investigate the welfare implications of two pre-crisis immigration waves (1991– 2000 and 2001–2010) and of the post-crisis wave (2011–2015) for OECD native citizens. To do so, we develop a general equilibrium model that accounts for the main channels of transmission of immigration shocks – the employment and wage effects, the fiscal effect, and the market size effect – and for the interactions between them. We parameterize our model for 20 selected OECD member states. We find that the three waves induce positive effects on the real income of natives, however the size of these gains varies considerably across countries and across skill groups. In relative terms, the post-crisis wave induces smaller welfare gains compared to the previous ones. This is due to the changing origin mix of immigrants, which translates into lower levels of human capital and smaller fiscal gains. However, differences across cohorts explain a tiny fraction of the highly persistent, cross-country heterogeneity in the economic benefits from immigration.

Suggested Citation

  • Michal Burzynski & Fre´de´ric Docquier & Hillel Rapoport, 2018. "The Changing Structure of Immigration to the OECD: What Welfare Effects on Member Countries?," Working Papers 2018-057, Human Capital and Economic Opportunity Working Group.
    • Handle: RePEc:hka:wpaper:2018-057
    Note: MIP
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    File URL: http://humcap.uchicago.edu/RePEc/hka/wpaper/Burzynski_Docquier_Rapoport_2018_changing-structure-immigration-OECD.pdf
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    References listed on IDEAS

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    Cited by:

    1. Docquier, Frédéric & Vasilakis, Chrysovalantis, 2024. "Migrants' Self-Selection and the Vicious Circle of Right-Wing Populism," IZA Discussion Papers 17402, Institute of Labor Economics (IZA).
    2. Frédéric Docquier & Riccardo Turati & Jérôme Valette & Chrysovalantis Vasilakis, 2020. "Birthplace diversity and economic growth: evidence from the US states in the Post-World War II period [Cultural diversity and economic growth: evidence from the US during the age of mass migration]," Journal of Economic Geography, Oxford University Press, vol. 20(2), pages 321-354.
    3. Docquier, Frédéric & Kone, Zovanga L. & Mattoo, Aaditya & Ozden, Caglar, 2019. "Labor market effects of demographic shifts and migration in OECD countries," European Economic Review, Elsevier, vol. 113(C), pages 297-324.
    4. Ikhenaode, Bright Isaac, 2024. "Immigration, skill acquisition, and fiscal redistribution in a search equilibrium model," Macroeconomic Dynamics, Cambridge University Press, vol. 28(1), pages 1-31, January.
    5. Frédéric Docquier & Chrysovalantis Vasilakis, 2024. "Migrants' Self-Selection and the Vicious Circle of Right-Wing Populism," LISER Working Paper Series 2024-10, Luxembourg Institute of Socio-Economic Research (LISER).
    6. Frédéric Docquier & Bright Isaac Ikhenaode & Hendrik Scheewel, 2022. "Immigration, welfare, and inequality: How much does the labor market specification matter?," Review of International Economics, Wiley Blackwell, vol. 30(5), pages 1315-1347, November.

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    More about this item

    Keywords

    immigration; welfare; crisis; Inequality; general equilibrium;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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