Europe's Migration Experience and its Effects on Economic Inequality

37 Pages Posted: 20 Jan 2021

See all articles by Martin Guzi

Martin Guzi

Masaryk University; Central European Labour Studies Institute (CELSI); IZA Institute of Labor Economics

Martin Kahanec

Central European University (CEU)

Magdalena Ulceluse

University of Groningen

Abstract

This chapter provides the historical context for the past half-century in Europe focusing specifically on the link between migration and economic development and inequality. The literature review suggests that there are several channels through which migration affects economic inequality between countries in one or the other direction. The net effects are an open empirical question and are likely to depend on the economic, demographic and institutional and policy contexts; sources, types and selectivity of migration, as well as responses of the receiving societies as well as migrants themselves. We undertake an empirical analysis and find that immigration has contributed to reducing inequality within the 25 EU countries over the 2003-2017 period. As the EU attracted relatively highly qualified immigrants throughout this period, our results are consistent with the ameliorating effect of skilled migration on within-country inequality, as predicted by theory.

JEL Classification: D31, D60, O15

Suggested Citation

Guzi, Martin and Kahanec, Martin and Ulceluse, Magdalena, Europe's Migration Experience and its Effects on Economic Inequality. IZA Discussion Paper No. 14041, Available at SSRN: https://ssrn.com/abstract=3767278

Martin Guzi

Masaryk University ( email )

Lipova 41a
Brno, 60200
Czech Republic
+420549496766 (Phone)

HOME PAGE: http://www.muni.cz/econ/people/233611

Central European Labour Studies Institute (CELSI)

Zvolensk√° 29
Bratislava, 82109
Slovakia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://legacy.iza.org/en/webcontent/personnel/photos/index_html?key=5347

Martin Kahanec (Contact Author)

Central European University (CEU) ( email )

Nador utca 9
Budapest, H-1051
Hungary

Magdalena Ulceluse

University of Groningen

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