Modelling the Effects of Immigration on Regional Economic Performance and the Wage Distribution: A Cge Analysis of Three EU Regions
40 Pages Posted: 22 Dec 2009
Abstract
The paper uses a regional Computable General Equilibrium (CGE) model to analyse the effects of immigration on three small remote EU regions located within Scotland, Greece and Latvia. Two migration scenarios are assessed. In the first, total labour supply is affected. In the second, the importance of migratory flows by differential labour skill types is investigated. The results indicate significant differences in the extent to which regional economies are affected by immigration. They also suggest that remote regions are highly vulnerable to the out-migration of skilled workers ('brain-drain') while the in-migration of unskilled workers leads to widening wage inequality.
Keywords: immigration, CGE, skills, wage inequality, brain-drain, regional economies
JEL Classification: D33, D58, R13, R23
Suggested Citation: Suggested Citation
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