Modelling the effects of immigration on regional economic performance and wage distribution: a Computable General Equilibrium (CGE) analysis of three European Union regions

Konstantinos Pouliakas, Deborah Roberts, Eudokia Balamou, Dimitris Psaltopoulos

Research output: Contribution to journalArticle

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.
Original languageEnglish
Pages (from-to)318-338
Number of pages21
JournalRegional Studies
Volume48
Issue number2
Early online date28 Feb 2012
DOIs
Publication statusPublished - 2014

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computable general equilibrium analysis
wage
immigration
European Union
migration
unskilled worker
brain drain
skilled worker
out-migration
Latvia
regional economy
labor supply
equilibrium model
economics
Greece
modeling
performance
EU
labor
scenario

Keywords

  • immigration
  • computable general equilibrium (CGE)
  • wage inequality
  • brain-drain
  • regional economies

Cite this

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title = "Modelling the effects of immigration on regional economic performance and wage distribution: a Computable General Equilibrium (CGE) analysis of three European Union regions",
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.",
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author = "Konstantinos Pouliakas and Deborah Roberts and Eudokia Balamou and Dimitris Psaltopoulos",
note = "Acknowledgments The paper is based on research carried out as part of the European Union 6th Framework project ‘TERA’ FP6-SSP-2005-006469. The authors are grateful to Euan Phimister and Daina Saktina for their invaluable contribution to the development of the model used in this paper. Useful comments by members of the European Union project TERA; participants at the IMAEF2008 meeting held at the University of Ioannina (Greece); and of members of a seminar at the University of Cyprus are also gratefully acknowledged; as are comments from the anonymous referees. The usual disclaimer applies.",
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AU - Psaltopoulos, Dimitris

N1 - Acknowledgments The paper is based on research carried out as part of the European Union 6th Framework project ‘TERA’ FP6-SSP-2005-006469. The authors are grateful to Euan Phimister and Daina Saktina for their invaluable contribution to the development of the model used in this paper. Useful comments by members of the European Union project TERA; participants at the IMAEF2008 meeting held at the University of Ioannina (Greece); and of members of a seminar at the University of Cyprus are also gratefully acknowledged; as are comments from the anonymous referees. The usual disclaimer applies.

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AB - 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.

KW - immigration

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