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Corresponding Author:
Romano PIRAS, Department of Political and Social Sciences, University of Cagliari, Italy

Coauthors:
Ivan Etzo, Department of Economics and Business, University of Cagliari, Italy
Carla Massidda, Department of Economics and Business, University of Cagliari, Italy
Paolo Mattana, Department of Economics and Business, University of Cagliari, Italy

A Panel Svar Analysis of the Long-Run Economic Impacts of Migration

Volume 74 - Issue 2, May 2021
(pp. 197-224)
JEL classification: F22, J11, J61
Keywords: Migration, Panel SVAR, Heterogeneous IRFs, Policy suggestions

Abstract

This paper applies heterogeneous panel SVAR methodologies to investigate the long-run macroeconomic impacts of a migration shock. Data are from 19 OECD countries, observed for the 1985-2013 period. Sample median responses to common one-unit shocks in net migration comply with the traditional view of a nil long-run impact. Conversely, responses to idiosyncratic structural shocks show a clear role for immigration in up-lifting the steady-state level of total factor productivity and labor productivity and in decreasing the capital/labor ratio. Correlating individual country IRFs with a battery of country-specific macroeconomic indicators unveils that our findings are consistent with two distinct interaction models between receiving economies and immigrants. Specifically, there are countries for which selective immigration policies induce a joint jump in the steady-state values of tfp and labor productivity (leaving unaffected the capital/labor ratio) and others, relatively specialized in services and with tight labor markets, where capital/immigrants complementarities may also be achieved.

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A Panel Svar Analysis of the Long-Run Economic Impacts of Migration

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Institute for International Economics of the Genoa Chamber of Commerce

Institute for International Economics
of the Genoa Chamber of Commerce