Migration in Europe

OECD NERO MeetingJuly 6, Paris

Ruud A. de MooijCPB 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)

0

20

40

60

80

100

TurkishMaroccanSurinamAntillian NL

Follow-up migration

Dependency ratio Dutch immigrants

Net income of migrants (NL = 100)

20

40

60

80

100

TurkishMaroccanSurinamAntillian NL

Brain drain

0

0,5

1

1,5

2

60 80 00

Turkey

Nl ant

Age structure of Dutch migrants

0

0,02

0,04

0,06

0,08

0,1

0,12

0,14

0,16

0 5101520253035404550556065707580859095

MigrantsNatives

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

–

0

0,5

1

1,5

2

2,5

ItSp

Ger Fr NlCz

Slk Pol Lith EU US

Regional unemployment dispersion

–

0

10

20

30

40

50

60It Sp

Ger Fr

Nl

Cz

Slk

Pol

Hun Lith

coe

ffic

ien

t o

f va

ria

tio

n

Regional wage dispersion

–

0

5

10

15

20

It SpGer Fr Nl

CzSlk Pol

Hun Lith

co

eff

icie

nt

of

vari

ati

on

Migration responses in the EU

in % pop.x 1000

average region(2,2 mln)

Wage

Unemploymentrate

5.0

-0.95

11,176

-2,100

Effect of u on migration rate

In (-) Out (+) Net (-)x 1000

CzechPolandLithuania

-0-

-+-

-.02-.08-.41

ItalySpainEU-15

-0

++

-.30-.59-.95

Effect of w on migration rate

In (+) Out (-) Net (+)x 1000

CzechPolandSlovakia

+++

+++

+3.85+3.01+3.05

ItalySpainEU-15

-+

-+

00+5.01

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