Modelling Migration in an OLG Framework: the Case of UK Migration Policy

Katerina Lisenkova, Marcel Mérette

Research output: Book/ReportCommissioned report

Abstract

This paper uses an OLG CGE model for the UK to illustrate the long-term effect on migration on the macroeconomy. As an illustration we use current UK government's migration target to reduce net migration "from hundreds of thousands to tens of thousands". Achieving this target would require to reduce recent net migration numbers by a factor of 2. In our simulations we compare the impact of demographic shock based on the principal ONS population projections with the lower migration scenario, which assumes that migration rates are reduced by 50%. Our results show that such a significant reduction in net migration has strong negative effect on the economy. Both level of GDP and GDP per capita fall during the simulation period. Moreover this policy has significant negative impact on public finances. As a result of growing gap between government revenues and spending, public debt increases by 8 percentage points of GDP in case or lower migration. See above See above
LanguageEnglish
Place of PublicationNorthampton, MA
Number of pages20
Volume6164
Publication statusPublished - 31 May 2013

Publication series

NameEcoMod2013

Fingerprint

Modeling
Migration policy
Simulation
Scenarios
Population projections
Factors
GDP per capita
CGE model
Government revenue
Government
Public finance
Macroeconomy
Public debt
Government spending
Demographic shocks

Keywords

  • UK
  • general equilibrium modeling
  • impact and scenario analysis

Cite this

Lisenkova, K., & Mérette, M. (2013). Modelling Migration in an OLG Framework: the Case of UK Migration Policy. (EcoMod2013). Northampton, MA.
Lisenkova, Katerina ; Mérette, Marcel. / Modelling Migration in an OLG Framework : the Case of UK Migration Policy. Northampton, MA, 2013. 20 p. (EcoMod2013).
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author = "Katerina Lisenkova and Marcel M{\'e}rette",
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Lisenkova, K & Mérette, M 2013, Modelling Migration in an OLG Framework: the Case of UK Migration Policy. EcoMod2013, vol. 6164, Northampton, MA.

Modelling Migration in an OLG Framework : the Case of UK Migration Policy. / Lisenkova, Katerina; Mérette, Marcel.

Northampton, MA, 2013. 20 p. (EcoMod2013).

Research output: Book/ReportCommissioned report

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N2 - This paper uses an OLG CGE model for the UK to illustrate the long-term effect on migration on the macroeconomy. As an illustration we use current UK government's migration target to reduce net migration "from hundreds of thousands to tens of thousands". Achieving this target would require to reduce recent net migration numbers by a factor of 2. In our simulations we compare the impact of demographic shock based on the principal ONS population projections with the lower migration scenario, which assumes that migration rates are reduced by 50%. Our results show that such a significant reduction in net migration has strong negative effect on the economy. Both level of GDP and GDP per capita fall during the simulation period. Moreover this policy has significant negative impact on public finances. As a result of growing gap between government revenues and spending, public debt increases by 8 percentage points of GDP in case or lower migration. See above See above

AB - This paper uses an OLG CGE model for the UK to illustrate the long-term effect on migration on the macroeconomy. As an illustration we use current UK government's migration target to reduce net migration "from hundreds of thousands to tens of thousands". Achieving this target would require to reduce recent net migration numbers by a factor of 2. In our simulations we compare the impact of demographic shock based on the principal ONS population projections with the lower migration scenario, which assumes that migration rates are reduced by 50%. Our results show that such a significant reduction in net migration has strong negative effect on the economy. Both level of GDP and GDP per capita fall during the simulation period. Moreover this policy has significant negative impact on public finances. As a result of growing gap between government revenues and spending, public debt increases by 8 percentage points of GDP in case or lower migration. See above See above

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Lisenkova K, Mérette M. Modelling Migration in an OLG Framework: the Case of UK Migration Policy. Northampton, MA, 2013. 20 p. (EcoMod2013).