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A permanent effect of temporary immigration on economic growth

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  • J. Muysken
  • T. H. W. Ziesemer

Abstract

Immigration can help to lessen the burden of ageing for the welfare states of most Western economies. To show this, we develop a decomposition framework for Gross Domestic Product (GDP) per capita which deals with the impact of both ageing and immigration on economic growth. Using a Vector Error Correction Model (VECM) for the Netherlands during 1973 to 2009, we demonstrate the empirical relevance of some crucial interactions between elements of that decomposition. The conclusion is that even temporary immigration may help to alleviate the ageing problem through a positive long-term contribution to employment, wages and GDP per capita, as long as the immigrants are able to participate in the labour force in tandem with the native population. Unfavourable short-term effects should be avoided through a gradual phasing in of immigration policies.

Suggested Citation

  • J. Muysken & T. H. W. Ziesemer, 2013. "A permanent effect of temporary immigration on economic growth," Applied Economics, Taylor & Francis Journals, vol. 45(28), pages 4050-4059, October.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:28:p:4050-4059
    DOI: 10.1080/00036846.2012.748178
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    References listed on IDEAS

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    1. Martin Werding, 2008. "Ageing and Productivity Growth: Are there Macro-level Cohort Effects of Human Capital?," CESifo Working Paper Series 2207, CESifo.
    2. Muysken, J. & Corvers, F. & Ziesemer, T.H.W., 2008. "Immigration can alleviate the ageing problem," Research Memorandum 004, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    3. Muysken, Joan & Ziesemer, Thomas, 2011. "Immigration and growth in an ageing economy," MERIT Working Papers 2011-012, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
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    1. von Gaessler, Anne Edle & Ziesemer, Thomas, 2016. "Optimal education in times of ageing: The dependency ratio in the Uzawa–Lucas growth model," The Journal of the Economics of Ageing, Elsevier, vol. 7(C), pages 125-142.
    2. Gindra Kasnauskiene & Karol Michnevic, 2017. "Contribution of increased life expectancy to economic growth: evidence from CEE countries," International Journal of Economic Sciences, International Institute of Social and Economic Sciences, vol. 6(2), pages 82-99, November.
    3. Rosario Aldunate D. & Gabriela Contreras M. & Claudia de la Huerta F. & Matías Tapia G., 2018. "Caracterización de la migración reciente en Chile," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 21(3), pages 110-123, December.
    4. Roger Wilkins & Mark Wooden, 2014. "Two Decades of Change: The Australian Labour Market, 1993–2013," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 47(4), pages 417-431, December.
    5. Rosario Aldunate & Gabriela Contreras & Claudia De la Huerta & Matías Tapia, 2019. "Characterization of the Recent Immigration to Chile," Working Papers Central Bank of Chile 830, Central Bank of Chile.
    6. Silvia Mendolia & Alex Tosh & Oleg Yerokhin, 2016. "Ethnic Diversity and Trust: New Evidence from Australian Data," The Economic Record, The Economic Society of Australia, vol. 92(299), pages 648-665, December.
    7. Joan Muysken & Thomas Ziesemer, 2014. "The Effect of Immigration on Economic Growth in an Ageing Economy," Bulletin of Applied Economics, Risk Market Journals, vol. 1(1), pages 35-63.

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