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Edited by Eugenia Vella · Jordi Caballé · Joan Llull Understanding Migration with Macroeconomics Understanding Migration with Macroeconomics Eugenia Vella • Jordi Caballé • Joan Llull Editors Understanding Migration with Macroeconomics Editors Eugenia Vella Jordi Caballé University of Sheffield, Sheffield, UK Universitat Autònoma de Barcelona Barcelona, Spain MOVE, Barcelona, Spain Barcelona GSE, Barcelona, Spain Joan Llull MOVE, Barcelona, Spain Universitat Autònoma de Barcelona Barcelona, Spain Barcelona GSE, Barcelona, Spain ISBN 978-3-030-40980-7 ISBN 978-3-030-40981-4 (eBook) https://doi.org/10.1007/978-3-030-40981-4 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Contents 1 I ntroduction 1 Eugenia Vella Part I Migration and the Macroeconomy: Empirical Evidence 25 2 The Impact of Immigration on Productivity 27 Joan Llull 3 Macroeconomic Consequences of International Migration for OECD Countries 59 Hippolyte d’Albis and Ekrame Boubtane 4 The Economics of Brain Waste 87 Emily R. Barker Part II Migration and the Macroeconomy: A Search and Matching Approach 115 5 Immigration and Job Creation 117 Andri Chassamboulli v vi Contents 6 Doing Business in the Shadows: Informal Firms, Irregular Immigrants and the Government 161 Eleni Kyrkopoulou and Theodore Palivos 7 Productivity Shocks, VAT Hikes and Emigration 187 Guilherme Bandeira, Jordi Caballé, and Eugenia Vella 8 Economic Migration with Matching Frictions and Business Cycle Amplification 223 Matija Lozej Part III Interdisciplinary Insights 251 9 Insights into Migration with Macroeconomics: An Interdisciplinary Assessment 253 Emmanuel Comte and Anna Kyriazi Index 277 Notes on Contributors Guilherme Bandeira holds a Ph.D. from the European University Institute in Florence and is affiliated with the New South Wales Treasury in Australia. Previously, Guilherme worked as a Staff Economist in the Macro-financial Analysis and Monetary Policy Department of the Bank of Spain. His work has appeared in the International Journal of Central Banking. Emily R. Barker is an Economic and Social Research Council (ESRC) funded Ph.D. student at the University of Sheffield, UK, and an associate fellow of the Higher Education Academy. The title of her Ph.D. thesis is “Essays in the Macroeconomics of Migration”. Ekrame Boubtane is Associate Professor of Economics and Fellow of the Centre for Studies and Research on International Development at University Clermont Auvergne in France. She is also Invited Professor at the Paris School of Economics. Her research interests are in international migration. Her work has appeared in the Journal of Economic Dynamics and Control and Oxford Economic Papers, among others. Jordi Caballé is Professor of Economics at Universitat Autònoma de Barcelona, fellow of Fundació Markets Organizations and Votes in Economics (MOVE) and affiliated professor at the Barcelona Graduate School of Economics. He holds a Ph.D. from the University of vii viii Notes on Contributors Pennsylvania. He has authored more than 35 journal articles, and they have appeared in many journals, including Econometrica, Journal of Political Economy, and Review of Economic Studies. Andri  Chassamboulli is Assistant Professor of Economics at the University of Cyprus. Andri holds a Ph.D. from the University of Maryland. Most of her research is on frictional labour markets and immi- gration. Her research has appeared in journals such as the International Economic Review and Review of Economic Dynamics. Emmanuel Comte is a Senior Research Fellow in the area of Migrations at CIDOB, Barcelona Centre for International Affairs. Emmanuel holds a Ph.D. in the History of Europe and of International Relations from Sorbonne University. Previously, he held positions at the European University Institute, the University of California, Berkeley, and the Vienna School of International Studies. He has recently published The History of the European Migration Regime: Germany’s Strategic Hegemony (Routledge, 2018). Hippolyte d’Albis is Senior Researcher at CNRS and Professor at the Paris School of Economics. He specializes in population ageing, genera- tional economics, and international migration. He is an associate editor at the Journal of the Economics of Ageing, the Journal of Demographic Economics, and Public Finance Review. His work has appeared in the Journal of Economic Theory, Journal of Mathematical Economics and International Economic Review, among others. Anna Kyriazi is a Postdoctoral Researcher at the University of Milan. Previously, she was a Postdoctoral Research Fellow at the Institut Barcelona d’Estudis Internacionals. She holds a Ph.D. in Political and Social Sciences from the European University Institute in Florence. She works on comparative ethnicity and nationalism, migration, and political communication. She has published in Ethnic and Migration Studies and Ethnicities and with top academic publishers. Eleni Kyrkopoulou is a Postdoctoral Researcher at Athens University of Economics and Business and a Research Analyst at the National Bank of Greece. Her research interests lie in the areas of Labour Economics, Immigration, Crime, and Education. Notes on Contributors ix Joan Llull is Director of Fundació Markets Organizations and Votes in Economics (MOVE), Associate Professor at Universitat Autònoma de Barcelona, and affiliated Professor at the Barcelona Graduate School of Economic. His work has appeared in the Review of Economic Studies and the Journal of Human Resources, among others. He holds a Starting Grant from the European Research Council. He has editorial positions at Economic Journal, Review of Economic Studies, Labour Economics, and SERIES. Matija Lozej is a Senior Economist at the Central Bank of Ireland, Irish Economic Analysis, Macroeconomic Modelling. Matija holds a Ph.D. from the University of Amsterdam. He has worked with small open economy and multi-country Dynamic Stochastic General Equilibrium models with labour market and financial frictions. His work has appeared in NBER International Seminar on Macroeconomics, International Journal of Central Banking, and Labour Economics, among others. Theodore Palivos is Professor of Economics at Athens University of Economics and Business. He has also been on the faculty of Louisiana State University and Tilburg University. His research interests are in the areas of Labour Economics, Macroeconomics, and Public Economics. He has served on several editorial boards and as co-editor of the Journal of Macroeconomics. He has authored more than 35 journal articles, and they have appeared in many journals, including American Economic Review, Review of Economic Studies, International Economic Review, and Journal of Economic Theory. Eugenia Vella is an Assistant Professor at the University of Sheffield, UK, and Marie Skłodowska-Curie Fellow in Fundació Markets Organizations and Votes in Economics (MOVE) in Barcelona. Previously, she was Jean Monnet and Max Weber Fellow at the European University Institute in Florence. She holds a Ph.D. from the Athens University of Economics and Business. Her work has appeared in the Journal of International Economics, Journal of Economic Dynamics and Control, and Economic Inquiry, among others. List of Figures Fig. 1.1 Population share (%) of immigrants in EU15 countries (except for Luxembourg), 2017. (Source: Eurostat) 4 Fig. 1.2 Percentage change in immigrant population share in EU15 countries, 2009–2017. (Source: Eurostat) 5 Fig. 1.3 Net migration flows (outflows-inflows) for Europe’s peripheral countries in thousands of people, 2002–2016. (Source: Eurostat) 6 Fig. 1.4 Education attainment by country of birth, 2017. Note: Level 0–2: less than primary, primary and lower secondary education; Level 3–4: upper secondary and post-secondary non-tertiary education; Level 5–8: tertiary education. (Source: Eurostat) 8 Fig. 1.5 Age structure of the national and non-national populations (%), EU28, 1 January 2016. (Source: Eurostat) 9 Fig. 1.6 Sum of migration inflows (in thousands) to Germany from Romania, Bulgaria, Poland, Romania, Slovakia, Latvia, Hungary. (Source: Destatis) 9 Fig. 1.7 Sum of migration inflows (in thousands) to Germany from Portugal, Ireland, Greece, Spain. (Source: Destatis) 10 Fig. 1.8 Age structure of the national (left) and non-national (right) populations (%), Germany, 2017. (Source: Eurostat) 11 Fig. 1.9 Educational attainment in Germany by country of birth, 2017. Note: Level 0–2: less than primary, primary and lower xi

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