CPB Netherlands Bureau for Economic Policy Analysis

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Presentation transcript:

CPB Netherlands Bureau for Economic Policy Analysis Migration in Europe OECD NERO Meeting July 6, Paris Ruud A. de Mooij CPB Netherlands Bureau for Economic Policy Analysis

Migration in Europe Immigration from outside EU (2/3) labour market tightness ageing Labour mobility within the EU (1/3) income/unemployment disparities asymmetric shocks EU enlargement

Does Europe need more immigrants? UN report: constant ratio 65+ and age 15-64 --> NL in 2100: +580% CPB report: constant fiscal burden --> NL in 2100: +18%

Economic effects of immigration Fiscal impact Revenue Expenditure Labour market effects Wage (-distribution) Unemployment Externalities

Critical factors for economic effects: the Dutch experience Participation rate / follow-up Dependency ratio Skill level / average income Age structure

Participation rate Dutch immigrants (NL = 100)

Follow-up migration

Dependency ratio Dutch immigrants

Net income of migrants (NL = 100)

Brain drain

Age structure of Dutch migrants

Conclusions on external migration Prime motivation is ageing Economic impact depends on: Participation (-) Dependency ratio (-) Skill (-) Age (+)

Labour mobility in the EU Labour mobility and regional disparities Responsiveness to wage and unemployment differentials Why is labour mobility low? Preferences Policy distortions

Gross migration rates

Regional unemployment dispersion

Regional wage dispersion

Migration responses in the EU

Effect of u on migration rate

Effect of w on migration rate

Why is mobility low? Population vs labour migration Language Culture Female participation Institutions

Institutional barriers to mobility Housing market (Oswald) Social insurance (pensions) Diplomas Informational barriers Regional aid