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The Dynamic Effects of Changes to Japanese Immigration Policy

Author

Listed:
  • Ryne Belliston

    (Department of Economics, Brigham Young University)

  • Scott Bradford

    (Department of Economics, Brigham Young University)

  • Kerk L. Phillips

    (Department of Economics, Brigham Young University)

Abstract

This paper constructs a single-sector dynamic stochastic general equilibrium (DSGE) model for a trading economy. We are able to examine the effects on output, consumption, factor prices, and utility. We do this for both steady states and for transition paths. By including macroeconomic shocks, we are able to calculate confidence bands around our policy impulse response functions. We find that while the effects of immigration are likely to be observable in aggregate data, the welfare effects on households of all types is small relative to the natural fluctuations in utility coming from economic fluctuations at business cycle frequencies. The effects are also small relative to the upward trend in utility due to technical progress. We find that household utility rises most for immigration policies that favor skilled immigrants, though different types of domestic households will favor slightly different policies.

Suggested Citation

  • Ryne Belliston & Scott Bradford & Kerk L. Phillips, 2014. "The Dynamic Effects of Changes to Japanese Immigration Policy," BYU Macroeconomics and Computational Laboratory Working Paper Series 2014-02, Brigham Young University, Department of Economics, BYU Macroeconomics and Computational Laboratory.
    • Handle: RePEc:byu:byumcl:201402
    as

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    References listed on IDEAS

    as
    1. Christiano, Lawrence J, 2002. "Solving Dynamic Equilibrium Models by a Method of Undetermined Coefficients," Computational Economics, Springer;Society for Computational Economics, vol. 20(1-2), pages 21-55, October.
    2. Schmitt-Grohe, Stephanie & Uribe, Martin, 2003. "Closing small open economy models," Journal of International Economics, Elsevier, vol. 61(1), pages 163-185, October.
    3. Phillips, Kerk L., 2010. "A Dynamic General Equilibrium Analysis of Japanese & Korean Immigration," MPRA Paper 23501, University Library of Munich, Germany.
    4. Scott M. Fuess, 2003. "Immigration Policy and Highly Skilled Workers: The Case of Japan," Contemporary Economic Policy, Western Economic Association International, vol. 21(2), pages 243-257, April.
    5. Dekle, Robert, 2004. "Financing consumption in an aging Japan: The role of foreign capital inflows and immigration," Journal of the Japanese and International Economies, Elsevier, vol. 18(4), pages 506-527, December.
    6. Shimasawa, Manabu & Oguro, Kazumasa, 2010. "Impact of immigration on the Japanese economy: A multi-country simulation model," Journal of the Japanese and International Economies, Elsevier, vol. 24(4), pages 586-602, December.
    7. Selahattin İmrohoroğlu & Sagiri Kitao & Tomoaki Yamada, 2017. "Can Guest Workers Solve Japan'S Fiscal Problems?," Economic Inquiry, Western Economic Association International, vol. 55(3), pages 1287-1307, July.
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    More about this item

    Keywords

    labor migration; factor mobility; dynamic general equilibrium; Japan;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

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