Immigration and Economic Growth

This paper provides empirical estimates of the impact of immigration on economic growth. A dynamic overlapping generations computable general equilibrium (OLG-CGE) model is used for this purpose. The basic structure of the model follows in the Auerbach and Kotlikoff tradition. However, the model takes into consideration directly age-specific mortality. This is analogous to “building in” a cohort-component population projection structure to the model, which allows more complex and more realistic demographic scenarios to be considered. The model is calibrated for Scotland. Scotland is an interesting case study since it is likely that both the population and the labour force will decrease in size considerably in the future. In addition, the population is expected to age rapidly over the coming decades. The analysis suggests that modest levels of net-migration, driven by higher levels of immigration, are associated with considerably higher levels of economic growth. See above See above