Against the backdrop of the war in Ukraine, immigration into the European Union (EU) reached a historical high in 2022 and stayed significantly above pre-pandemic levels in 2023. The recent migration has helped accommodate strong labor demand, with around two-thirds of jobs created between 2019 and 2023 filled by non-EU citizens, while unemployment of EU citizens remained at historical lows. Ukrainian refugees also appear to have been absorbed into the labor market faster than previous waves of refugees in many countries. The stronger-than-expected net migration over 2020-23 into the euro area (of around 2 million workers) is estimated to push up potential output by around 0.5 percent by 2030—slightly less than half the euro area’s annual potential GDP growth at that time—even if immigrants are assumed to be 20 percent less productive than natives. This highlights the important role immigration can play in attenuating the effects of the Europe’s challenging demographic outlook. On the flipside, the large inflow had initial fiscal costs and likely led to some congestion of local public services such as schooling. Policy efforts should thus seek to continue to integrate migrants into the labor force while making sure that the supply of public services and amenities (including at the local level) keeps up with the population increase.
Authors
Francesca Caselli, Huidan Huidan Lin, Frederik G Toscani, Jiaxiong Yao
- DOI
- https://doi.org/10.5089/9798400289552.001
- ISBN
- 9798400289552
- ISSN
- 1018-5941
- Issue
- 211
- Pages
- 44
- Published in
- United States of America
- Stock No
- WPIEA2024211
- Volume
- 2024
- key
- SeriesWorking Paper No. 2024/211
Table of Contents
- Migration into the EU Stocktaking of Recent Developments and Macroeconomic Implications 1
- Francesca Caselli Huidan Lin Frederik Toscani and Jiaxiong Yao 1
- WP24 1
- Migration into the EU Stocktaking of Recent Developments and Macroeconomic Implications 3
- Prepared by Francesca Caselli Huidan Lin Frederik Toscani and Jiaxiong Yao 3
- Contents 4
- Executive Summary 6
- 1. Introduction 7
- 2. A Brief Overview of the Literature 8
- 3. Recent Migration Developments 10
- Migration Flows and Population Stocks 10
- Integration Policies in the European Union 15
- 4. The Macroeconomic Implications 19
- Labor Markets 19
- Potential Output 23
- 5. Local Economic Implications 26
- 6. Perceptions of Migrants 27
- Drivers of Perceptions Exploring Regional and Individual Characteristics 28
- 7. Conclusion and Policy Implications 30
- References 33
- Annex I. Measurement of Migration and Migrants 40
- Annex II. A Further Look at Aggregate 42
- Perceptions Data 42
