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Global Ageing and the Macroeconomic Consequences of Migration from Neighborhood Countries to Europe

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EU Eastern Neighborhood

Abstract

In this paper, we assess the demographic and economic consequences of migration in Europe and neighborhood countries using a multi-region CGE-OLG model (INGENUE2). Our quantitative results shed some light on the long-term consequences of migration in regions that are not at the same stage in the ageing process. Despite some improvement in the public pension systems of host regions, it appears that a realistic migration scenario does not offset the effect of ageing in host regions, leaving room for more pension reforms. The adverse economic consequences of emigration appear to be more serious if the region of origin is advanced in the ageing process. Finally, we consider and evaluate a policy of immigration in which the decline of the labor force in WE is eschewed.

Acknowledgements

 This paper reflects the opinions of the authors and does not necessarily express the views of the institutions they are affiliated with. We thank Frédéric Docquier and Abdeslam Marfouk for transmitting their dataset. We are grateful to Marek Dabrowski, Maryla Maliszewska, Toman Omar Mahmoud, Ainura Uzagalieva, Cyrille Schwellnus, Martine Carré and Agnès Bénassy-Quéré for useful comments and suggestions. The usual disclaimers apply.

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Notes

  1. 1.

    Storesletten (2000) investigates whether a reform of immigration policies could attenuate the fiscal burden of ageing in the coming decades. Iakova (2007) and Barrell et al. (2007) consider the macroeconomic effects of the migration that followed the enlargement of the EU in May 2004. Chojnicki et al. (2011) examine the economic impact of the second great immigration wave (1945–2000) on the US economy.

  2. 2.

    For technical features of the new INGENUE2 model, as well as for the baseline scenario and a sensitivity analysis of the main structural parameters, see INGENUE (2006, 2007). For a detailed presentation of the results described in this chapter, see Borgy and Chojnicki (2009).

  3. 3.

    The ‘Slavic world’ of the model corresponds more precisely to the East Slavic area (with the exception of Moldova included in this region for analytical purposes).

  4. 4.

    See Ingenue (2007) for a complete description of the baseline.

  5. 5.

    All these assumptions are necessary to avoid problems of agent heterogeneity that would complicate the computation of the transitory path.

  6. 6.

    The assessment of the immigration potential to Russia and WE from CIS countries also requires a number of assumptions to be made in order to reflect future differences in economic and political climate, policies and reform progress. More specifically, among the different scenarios suggested by Chojnicki and Uzagalieva (2008), we adopt the status-quo scenario in terms of catching-up, which is close to our assumptions on TFP.

  7. 7.

    Note that the emigration rates in EE and in the ‘Mediterranean world’ are relatively similar. The significant difference in the evolution of the dependency ratio is explained by the different demographic features between these two regions. The former is more advanced in the ageing process whereas the latter is still characterized by the sustained growth of its working-age population. The consequences of young workers emigrating are thus more serious in EE.

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Author information

Authors and Affiliations

  1. Banque de France, Paris, France

    Vladimir Borgy

  2. Equippe, University Lille 2 and CEPII, Paris, France

    Xavier Chojnicki

Authors
  1. Vladimir Borgy
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  2. Xavier Chojnicki
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Correspondence to Vladimir Borgy .

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Editors and Affiliations

  1. (CASE), Center for Social & Economic Research, ul. Sienkiewicza 12, Warsaw, 00-010, Poland

    Marek Dabrowski

  2. (CASE), Center for Social and Economic Research, ul. Sienkiewicza 12, Warsaw, 00-010, Poland

    Maryla Maliszewska

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Borgy, V., Chojnicki, X. (2012). Global Ageing and the Macroeconomic Consequences of Migration from Neighborhood Countries to Europe. In: Dabrowski, M., Maliszewska, M. (eds) EU Eastern Neighborhood. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-21093-8_6

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  • DOI: https://doi.org/10.1007/978-3-642-21093-8_6

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