cover image: Migration into the EU: Stocktaking of Recent Developments and Macroeconomic Implications

Migration into the EU: Stocktaking of Recent Developments and Macroeconomic Implications

27 Sep 2024

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.
european union migration population and demographics labor force aging labor labor markets

Authors

Francesca Caselli, Huidan Huidan Lin, Frederik G Toscani, Jiaxiong Yao

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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

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