Author(s): Mascarenhas, Rui Duarte
Date: 2016
Persistent ID: http://hdl.handle.net/10362/16501
Origin: Repositório Institucional da UNL
Subject(s): Skill premium; Welfare benefits; Refugees; European union; International migration; Domínio/Área Científica::Ciências Sociais::Economia e Gestão
The recent massive inflow of refugees to the European Union (EU) raises a number of unanswered questions on the economic impact of this phenomenon. To examine these questions, we constructed an overlapping-generations model that describes the evolution of the skill premium and of the welfare benefit level in relevant European countries, in the aftermath of an inflow of asylum-seekers. In our simulation, relative wages of skilled workers increase between 8% and 11% in the period of the inflow; their subsequent time path is dependent on the initial skill premium. The entry of migrants creates a fiscal surplus of about 8%, which can finance higher welfare benefits in the subsequent periods. These effects are weaker in a scenario where refugees do not fully integrate into the labor market.
