[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/unm/unumer/2011055.html
   My bibliography  Save this paper

The effect of net immigration on economic growth in an ageing economy: transitory and permanent shocks

Author

Listed:
  • Muysken, Joan

    (School of Business and Economics, Maastricht University)

  • Ziesemer, Thomas

    (UNU-MERIT, and School of Business and Economics, Maastricht University)

Abstract
This paper argues that immigration can help to alleviate the burden ageing presents for the welfare states of most Western Economies. We develop a macroeconomic framework which deals with the impact of both ageing and immigration on economic growth. This is combined with a detailed model of the labour market, to include the interaction with low-skilled unemployment. The empirical relevance of some crucial model assumptions is shown to hold for the Netherlands, 1973 - 2009, using a vector-error-correction model. The conclusions from the analysis of transitory and permanent shocks are that immigration will help to alleviate the ageing problem in the long run, as long as the immigrants will be able to participate in the labour force at least as much as the native population. Moreover, the better educated the immigrants are or become, the higher their contribution to growth will be.

Suggested Citation

  • Muysken, Joan & Ziesemer, Thomas, 2011. "The effect of net immigration on economic growth in an ageing economy: transitory and permanent shocks," MERIT Working Papers 2011-055, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    • Handle: RePEc:unm:unumer:2011055
    as

    Download full text from publisher

    File URL: https://unu-merit.nl/publications/wppdf/2011/wp2011-055.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:bla:scandj:v:102:y:2000:i:3:p:463-79 is not listed on IDEAS
    2. Steinhardt Max Friedrich, 2011. "The Wage Impact of Immigration in Germany - New Evidence for Skill Groups and Occupations," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-35, June.
    3. Huber, Peter & Landesmann, Michael & Robinson, Catherine & Stehrer, Robert, 2010. "Migrants' Skills and Productivity: A European Perspective," National Institute Economic Review, National Institute of Economic and Social Research, vol. 213, pages 20-34, July.
    4. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    5. Thomas Lindh & Bo Malmberg, 2009. "European Union economic growth and the age structure of the population," Economic Change and Restructuring, Springer, vol. 42(3), pages 159-187, August.
    6. Rachel M. Friedberg & Jennifer Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 23-44, Spring.
    7. Francesc Ortega & Giovanni Peri, 2009. "The Causes and Effects of International Migrations: Evidence from OECD Countries 1980-2005," NBER Working Papers 14833, National Bureau of Economic Research, Inc.
    8. Herbert Brücker & Elke J. Jahn, 2011. "Migration and Wage‐setting: Reassessing the Labor Market Effects of Migration," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113, pages 286-317, June.
    9. Felbermayr, Gabriel J. & Hiller, Sanne & Sala, Davide, 2010. "Does immigration boost per capita income?," Economics Letters, Elsevier, vol. 107(2), pages 177-179, May.
    10. Morley, Bruce, 2006. "Causality between economic growth and immigration: An ARDL bounds testing approach," Economics Letters, Elsevier, vol. 90(1), pages 72-76, January.
    11. Martin Werding, 2008. "Ageing and Productivity Growth: Are there Macro-level Cohort Effects of Human Capital?," CESifo Working Paper Series 2207, CESifo.
    12. Muysken, J. & Corvers, F. & Ziesemer, T.H.W., 2008. "Immigration can alleviate the ageing problem," Research Memorandum 004, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    13. Muysken, Joan & Ziesemer, Thomas, 2011. "Immigration and growth in an ageing economy - version 2," MERIT Working Papers 2011-037, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Alexander Kemnitz, 2003. "Immigration, Unemployment and Pensions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 31-48, March.
    15. Holinski, N. & Kool, C.J.M. & Muysken, J., 2008. "Taking home bias seriously: absolute and relative measures explaining consumption risk-sharing," Research Memorandum 025, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    16. Abdurrahman Aydemir & George J. Borjas, 2011. "Attenuation Bias in Measuring the Wage Impact of Immigration," Journal of Labor Economics, University of Chicago Press, vol. 29(1), pages 69-113, January.
    17. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "Integration among Unequals," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 4, pages 83-104, World Scientific Publishing Co. Pte. Ltd..
    18. James Feyrer, 2007. "Demographics and Productivity," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 100-109, February.
    19. Cohen-Goldner, Sarit & Paserman, M. Daniele, 2011. "The dynamic impact of immigration on natives' labor market outcomes: Evidence from Israel," European Economic Review, Elsevier, vol. 55(8), pages 1027-1045.
    20. Mondria, Jordi & Wu, Thomas, 2010. "The puzzling evolution of the home bias, information processing and financial openness," Journal of Economic Dynamics and Control, Elsevier, vol. 34(5), pages 875-896, May.
    21. Francesc Ortega & Giovanni Peri, 2009. "The Causes and Effects of International Migrations: Evidence from OECD Countries 1980-2005," NBER Working Papers 14833, National Bureau of Economic Research, Inc.
    22. Casarico, Alessandra & Devillanova, Carlo, 2003. "Social security and migration with endogenous skill upgrading," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 773-797, March.
    23. Holinski, N. & Kool, C.J.M. & Muysken, J., 2009. "International Portfolio Balance: Modeling the External Adjustment Process," Research Memorandum 033, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    24. Jean, Sébastien & Jiménez, Miguel, 2011. "The unemployment impact of immigration in OECD countries," European Journal of Political Economy, Elsevier, vol. 27(2), pages 241-256, June.
    25. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    26. Vincent VANDENBERGHE & Fabio WALTENBERG, 2010. "Ageing Workforce, Productivity and Labour costs of Belgian Firms," LIDAM Discussion Papers IRES 2010003, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    27. Razin, Assaf & Sadka, Efraim, 1999. "Migration and pension with international capital mobility," Journal of Public Economics, Elsevier, vol. 74(1), pages 141-150, October.
    28. Ortega, Francesc & Peri, Giovanni, 2009. "The Causes and Effects of International Labor Mobility: Evidence from OECD Countries 1980-2005," MPRA Paper 19183, University Library of Munich, Germany.
    29. Michael Ben-Gad, 2008. "Capital-Skill Complementarity and the Immigration Surplus," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(2), pages 335-365, April.
    30. Tim Krieger, 2004. "Fertility rates and skill distribution in Razin and Sadka’s migration-pension model: A note," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(1), pages 177-182, February.
    31. Nannestad, Peter, 2007. "Immigration and welfare states: A survey of 15 years of research," European Journal of Political Economy, Elsevier, vol. 23(2), pages 512-532, June.
    32. Ekrame Boubtane & Jean-Christophe Dumont, 2013. "Immigration and economic growth in the OECD countries 1986-2006: A panel data analysis," Documents de travail du Centre d'Economie de la Sorbonne 13013, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    33. Assaf Razin & Efraim Sadka, 2000. "Unskilled Migration: A Burden or a Boon for the Welfare State?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 463-479, September.
    34. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    35. Chris Papageorgiou & Marianne Saam, 2008. "Two‐level CES Production Technology in the Solow and Diamond Growth Models," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(1), pages 119-143, March.
    36. Rafael Gómez & Pablo Hernández De Cos, 2008. "Does Population Ageing Promote Faster Economic Growth?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 350-372, September.
    37. Muller, Tobias, 2003. "Migration, unemployment and discrimination," European Economic Review, Elsevier, vol. 47(3), pages 409-427, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mathijs Gerritsen & Jens Høj, 2013. "The Dutch Labour Market: Preparing for the Future," OECD Economics Department Working Papers 1012, OECD Publishing.
    2. Kosta Josifidis & Novica Supic & Emilija Beker Pucar & Sladjana Srdic, 2014. "Labour migration flows: EU8+2 vs EU-15," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 15(1), pages 41-55, February.
    3. Ding, Hong, 2012. "Economic growth and welfare state: a debate of econometrics," MPRA Paper 39685, University Library of Munich, Germany.
    4. Joan Muysken & Ehsan Vallizadeh & Thomas Ziesemer, 2015. "Migration, Unemployment, and Skill Downgrading," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 403-451, April.
    5. Vallizadeh, Ehsan & Joan, Muysken & Thomas, Ziesemer, 2012. "The impact of medium-skilled immigration: a general equilibrium approach," MPRA Paper 40006, University Library of Munich, Germany.
    6. J. Muysken & T. H. W. Ziesemer, 2013. "A permanent effect of temporary immigration on economic growth," Applied Economics, Taylor & Francis Journals, vol. 45(28), pages 4050-4059, October.
    7. Kosta Josifidis & John Hall & Valérie Berenger & Novica Supić, 2013. "Eastern Migrations vs Western Welfare States – (Un)Biased Fears," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(3), pages 323-345, May.
    8. Ding, Hong, 2012. "Unemployment and Welfare State: What do the Data Tell Us?," MPRA Paper 41921, University Library of Munich, Germany.
    9. Muysken, Joan & Ziesemer, Thomas, 2011. "Immigration and growth in an ageing economy," MERIT Working Papers 2011-012, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Vallizadeh, Ehsan & Muysken, Joan & Ziesemer, Thomas, 2013. "Migration, unemployment, and skill downgrading : a specific-factors approach," IAB-Discussion Paper 201313, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    11. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    12. Joan Muysken & Thomas Ziesemer, 2014. "The Effect of Immigration on Economic Growth in an Ageing Economy," Bulletin of Applied Economics, Risk Market Journals, vol. 1(1), pages 35-63.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Joan Muysken & Thomas Ziesemer, 2014. "The Effect of Immigration on Economic Growth in an Ageing Economy," Bulletin of Applied Economics, Risk Market Journals, vol. 1(1), pages 35-63.
    2. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    3. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2013. "Immigration and economic growth in the OECD countries 1986-2006," Post-Print halshs-00800617, HAL.
    4. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2016. "Immigration and economic growth in the OECD countries 1986–2006," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 340-360.
    5. Ekrame Boubtane & Jean-Christophe Dumont & Christophe Rault, 2016. "Immigration and economic growth in the OECD countries 1986–2006," Oxford Economic Papers, Oxford University Press, vol. 68(2), pages 340-360.
    6. Edo Anthony, 2015. "The Impact of Immigration on Native Wages and Employment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1151-1196, July.
    7. Hippolyte d'Albis & Ekrame Boubtane & Dramane Coulibaly, 2016. "Immigration Policy and Macroeconomic Performance in France," Annals of Economics and Statistics, GENES, issue 121-122, pages 279-308.
    8. Ian Preston, 2014. "The Effect of Immigration on Public Finances," Economic Journal, Royal Economic Society, vol. 124(580), pages 569-592, November.
    9. Gianluca Orefice, 2010. "Skilled Migration and Economic Performances: Evidence from OECD Countries," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(IV), pages 781-820, December.
    10. Muysken, J. & Corvers, F. & Ziesemer, T.H.W., 2008. "Immigration can alleviate the ageing problem," Research Memorandum 004, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    11. repec:wsr:wpaper:y:2012:i:101 is not listed on IDEAS
    12. Gurgen Aslanyan, 2014. "The migration challenge for PAYG," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(4), pages 1023-1038, October.
    13. Dotti, Valerio, 2020. "No Country for Young People? The Rise of Anti-immigration Populism in Ageing Societies," MPRA Paper 100226, University Library of Munich, Germany.
    14. Kemnitz, Alexander, 2008. "Can immigrant employment alleviate the demographic burden? The role of union centralization," Economics Letters, Elsevier, vol. 99(1), pages 123-126, April.
    15. Tim Krieger, 2014. "Public Pensions and Immigration," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(2), pages 10-15, 07.
    16. Ekrame Boubtane & Dramane Coulibaly & Christophe Rault, 2013. "Immigration, Growth, and Unemployment: Panel VAR Evidence from OECD Countries," LABOUR, CEIS, vol. 27(4), pages 399-420, December.
    17. Martin Kahanec & Mariola Pytliková, 2017. "The economic impact of east–west migration on the European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 44(3), pages 407-434, August.
    18. Boubtane, Ekrame & Coulibaly, Dramane & Rault, Christophe, 2013. "Immigration, unemployment and GDP in the host country: Bootstrap panel Granger causality analysis on OECD countries," Economic Modelling, Elsevier, vol. 33(C), pages 261-269.
    19. Tim Krieger, 2014. "Public Pensions and Immigration," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(02), pages 10-15, July.
    20. Tim Krieger, 2008. "Public pensions and return migration," Public Choice, Springer, vol. 134(3), pages 163-178, March.
    21. Hippolyte d'Albis & Ekrame Boubtane & Dramane Coulibaly, 2015. "Immigration Policy and Macroeconomic Performance in France," Working Papers halshs-01162441, HAL.

    More about this item

    Keywords

    ageing; immigration; unemployment; skills;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unm:unumer:2011055. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ad Notten (email available below). General contact details of provider: https://edirc.repec.org/data/meritnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.