Thoenissen, C. and Smith, C. (2019) Skilled migration and business cycle dynamics. Journal of Economic Dynamics and Control, 109. 103781. ISSN 0165-1889
Abstract
Shocks to net migration matter for the business cycle. Using a structural vector autoregression and an estimated dynamic stochastic general equilibrium (DSGE) model of a small open economy, we find that migration shocks make an important contribution to the volatility of per capita GDP. Migration shocks contribute to variability in per capita consumption and investment, and to residential investment and real house prices. Despite the role of migration, other shocks remain more important drivers of these expenditure components and of housing market volatility. In the DSGE model, the level of human capital possessed by migrants relative to that of locals materially affects the business cycle impact of migration. The impact of migration shocks is larger when migrants have substantially different levels of human capital relative to locals. When the average migrant has more human capital than locals, as seems to be common for migrants into developed economies, a migration shock has an expansionary effect on per capita GDP and its components.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2019 TheAuthors. Published by Elsevier B.V. This is an open access article under the CC BY license (https://creativecommons.org/licenses/by/4.0/). |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 04 Nov 2019 15:56 |
Last Modified: | 17 Dec 2021 10:37 |
Status: | Published |
Publisher: | Elsevier |
Refereed: | Yes |
Identification Number: | 10.1016/j.jedc.2019.103781 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:152868 |