on the aggregate effects of immigration in spain

8/9/2019 ON THE AGGREGATE EFFECTS OF IMMIGRATION IN SPAIN

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Mario Izquierdo, Juan F. Jimeno

and Juan A. Rojas

ON THE AGGREGATE EFFECTSOF IMMIGRATION IN SPAIN

2007

Documentos de TrabajoN. 0714


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ON THE AGGREGATE EFFECTS OF IMMIGRATION IN SPAIN


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ON THE AGGREGATE EFFECTS OF IMMIGRATION IN SPAIN

Mario Izquierdo

BANCO DE ESPAA

Juan F. Jimeno

BANCO DE ESPAA, CEPR AND IZA

Juan A. Rojas

BANCO DE ESPAA

Documentos de Trabajo. N. 07142007


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The Working Paper Series seeks to disseminate original research in economics and finance. All papershave been anonymously refereed. By publishing these papers, the Banco de Espaa aims to contributeto economic analysis and, in particular, to knowledge of the Spanish economy and its internationalenvironment.

The opinions and analyses in the Working Paper Series are the responsibility of the authors and,

therefore, do not necessarily coincide with those of the Banco de Espaa or the Eurosystem.

The Banco de Espaa disseminates its main reports and most of its publications via the INTERNET at thefollowing website: http://www.bde.es.

Reproduction for educational and non-commercial purposes is permitted provided that the source isacknowledged.

BANCO DE ESPAA, Madrid, 2007

ISSN: 0213-2710 (print)ISSN: 1579-8666 (on line)

Depsito legal: M.28993-2007Unidad de Publicaciones, Banco de Espaa


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Abstract

This paper presents a dynamic general equilibrium model designed to compute the

aggregate impact of immigration, accounting for relevant supply and demand effects. We

calibrate the model to the Spanish economy, allowing for enough heterogeneity in thedemographic characteristics of immigrant and native workers. We consider an initial steady

state characterized by the age structure of the Spanish population in 1995 and study the

effects of several immigration scenarios on several macroeconomic variables (GDP,

employment, productivity, etc.).

Keywords: Immigration, general equilbrium models.

JEL Codes: E10, F22.


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0 5 10 1 5 2 0 25 30 3 5 4 0 45 5 0 5 5 600

0.02

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0.1

0.12

0.14

0.16

0.18Age distribution of imm igration flows

1 2 3 40

0.05

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0.15

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0.25

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0.35Occupation Distribution

natives

immigrants

20 25 30 35 40 45 50 55 600

0.5

1

1.5

2

2.5Age distribution of productivity natives

NMQ

NMNQ

MQ

MNQ

20 25 30 35 40 45 50 55 600

0.1

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0.4

0.5

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0.7Age profile of employment rates

natives

immigrants

BANCO DE ESPAA 22 DOCUMENTO DE TRABAJO N. 0714


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This negative eect on productivity could be avoided with a skill upgrade of the

composition of immigrant flows. There are also important eects of immigration

on the investment rate, while the impact on the saving rate is less significant.

Finally, none of the immigration scenarios contemplated in this exercise, what-

ever is size or composition, avoid a significant rise in pension expenditures and

a noticeable worsening in the financial situation of the Social Security system.

References

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