The welfare impact of global migration in the OECD countries

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 01.12.2015, 12:15 - 13:30


Presentation by 

Frédéric Docquier (LISER)


This paper quantifiees the e¤ect of global migration on the welfare of non-migrant OECD citizens. We develop an integrated, multi-country model that accounts for the interactions between the labor market, fiscal, and market-size e¤ects of migration, as well as for trade relations between countries. The model is calibrated to fit the economic and demographic characteristics of the 34 OECD countries and the rest of the world, as well as the trade flows between them in the year 2010. Using estimated elasticities from the empirical literature, we show that recent migration flows have increased the welfare of 69 percent of the non-migrant OECD population and of 83 percent of non-migrant citizens living in the 22 richest OECD countries. Contrary to popular perceptions, the winners mainly reside in traditional immigration countries; their gains are substantial and are essentially due to the entry of immigrants from non-OECD countries. Although labor market and fiscal e¤ects are non- negligible in some countries, the greatest source of gain comes from the market-size effect (i.e. the change in the variety of goods available to consumers). We conclude that the market-size effect is instrumental to explaining the welfare consequences of migration.

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