Back to search

VAM-Velferd, arbeid og migrasjon

Immigration, Inequality and the Welfare State: A Modern Macroeconomic Approach

Alternative title: Innvandring, ulikhet og velferdsstat: En Moderne Makroøkonomisk Tilnærming

Awarded: NOK 12.0 mill.

Project Number:

302661

Application Type:

Project Period:

2020 - 2026

Funding received from:

Partner countries:

Immigration has become one of the great transformative political issues of our time. The 2015 immigration wave, following war in the Middle East, was a large shock for European economies and has caused much debate among social scientists, policy makers and in the popular press. With many corners of the world continuing to be poor and unstable, new immigration waves are likely to come and immigration is likely to stay high on the political agenda. The goal of this project is to investigate the economic mechanisms through which immigration impacts the host economy and the institutions through which the host economy impacts the experience of migrants. More broadly it will investigate the interplay between welfare state policies, labor market frictions, labor market outcomes (unemployment, labor force participation, inequality), social welfare and immigration. In the first part of the project we quantify how differences in labor market institutions and public policy across OECD economies affect the labor market impact of a large immigration shock. In the second part we study how differences in labor market institutions and public policy across OECD economies affect the fiscal sustainability of the welfare state during a large immigration shock and how this depends on the socioeconomic composition of the migrants. Part three characterizes the optimal design of migrant allocation rules to European countries and optimal public policy responses for individual countries. In part four we quantify the impact of immigration and automation technologies on income and wealth inequality in the United States since 1980. Finally part five uses Norwegian micro data to obtain new insights about the distributions of income and consumption risk, which is important role for inequality and welfare. In the first year of the project we have completed a working paper on income risk. A revision of the paper has been requested by Journal of the European Economic Association, a good general interest journal. We are getting closer to a first paper about how differences in labor market institutions and public policy across OECD economies affect the labor market impact of a large immigration shock. A preliminary version was presented in the Oslo Macro Group April 2021. Web: https://www.sv.uio.no/econ/english/research/projects/IMWEL/index.html

The goal of this project is to investigate the economic mechanisms through which immigration impacts the host economy, and how the institutions of the host economy affect the experience of migrants. It will develop a new framework of analysis that accounts for the multifactorial nature of immigrant and native workers (e.g. age, wealth, education, and experience); the very different labor market dynamics observed across countries (i.e. job finding and separation rates); and the very different public policies observed across countries (the tax and social benefit system). We will quantify: i) the impact of the current immigration dynamics on labor markets (unemployment, labor force participation) and how this impact depends on institutional features and public policy; ii) the determinants (both institutional and individual-specific) of the speed of economic integration of immigrants and how this affects the fiscal sustainability of a migration shock; iii) the impact of immigration on wealth and income inequality as well as the interaction with institutional features; iv) The optimal way to allocate an immigration shock across European countries and optimal policy responses for individual countries. These results will help clarify potential misconceptions about the impacts of immigration and contribute to evidence-based policy design and implementation that can maximize the opportunities immigration presents and minimize displacement effects. At the same time, it will create expertise through the integration of new researchers into these topics and build capacity for future research in the field.

Publications from Cristin

No publications found

No publications found

No publications found

Funding scheme:

VAM-Velferd, arbeid og migrasjon