In this paper, we assess the demographic and economic consequences of migrations in Europe and neighbourhood countries. In order to do so, we rely on a multi-region world overlapping generations model (INGENUE2). The rich modeling framework of this multi-regions model allows us to put into connection migration with the "triangular" relationship between population aging, pension reforms and international capital markets. With this model, we are also able to quantify the demographic and economic consequences of migration ows on both the regions receiving and losing migrants. Our analysis is based on a very detailed migration scenario between Western Europe and the Neighborhood regions constructed by taking into account both the current situation and some prospective empirical scenarios. Our quantitative results shed some light on the long term consequences of migration on regions that are not at the same stage in the ageing process. Concerning the regions receiving migrants, despite some improvement of their public pension system, it appears that our realistic migration scenario does not offset the effect of ageing in these regions, leaving room for pension reforms. Concerning the regions losing migrants, the adverse economic consequences of emigration appear to be all the more important than the region is advanced in the ageing process (and is already suffering from a declining population).
Authored by: Vladimir Borgy and Xavier Chojnicki
Published in 2008
In this paper, we analyze the demographic and economic consequences of endogenous migrations flows over the coming decades in a multi-regions overlapping generations general equilibrium model (INGENUE 2) in which the world is divided in ten regions. Our analysis offers a global perspective on the consequences of international migration flows. The value-added of the INGENUE 2 model is that it enables us to analyze the effects of international migration on both the destination and the origin regions. A further innovation of our analysis is that international migration is treated as endogenous.
In a first step, we estimate the determinants of migration in an econometric model. We show, in particular, that the income differential is one of the key variables explaining migration flows. In a second step, we endogenize migration flows in the INGENUE 2 model. In order to do so, we use the econometrically estimated relationships between demographic and income developments in the INGENUE model, which enables us to project long-run migration flows and to improve on projections of purely demographic models.
Authored by: Vladimir Borgy, Xavier Chojnicki, Gelles Le Garrec, Cyrille Schwellnus
Published in 2009
Transform-Europe Productive Transformation discussion paper 2015Dr. Jean-Claude Simon
This document discusses the need for an alternative industrial policy and productive transformation in Europe to address social and environmental challenges. It analyzes the European Commission's Jobs, Growth and Investment Package (known as the Juncker Plan) as an insufficient response that relies too heavily on unrealistic leveraging of funds without meaningful new public investment. The document argues that austerity policies have deepened crises across Europe and that a more ambitious investment plan is needed to stimulate the real economy, reindustrialize Europe, and support its transition to more sustainable models of development.
The effect of Economic Conditions on Net Greek MigrationEmily Marshall
This document provides an introduction, literature review, model specification, data description, empirical results, and conclusions regarding a study analyzing the effect of economic conditions on Greek net migration from 1991-2014. The study uses econometric techniques to model the relationship between key economic indicators like GDP, inflation, unemployment, interest rates, and dummy variables for economic crisis and EU membership, on net migration. The initial linear model showed some issues which were partially addressed by transforming it to a log-log model. Overall, the study found GDP and unemployment were statistically significant in explaining migration, and concluded that strengthening Greece's economic position could help stabilize net migration flows.
1) This document is a bachelor thesis that examines how China's foreign direct investment behavior in the European Union changed after the 2009 European sovereign debt crisis.
2) It develops hypotheses about whether China diversified its FDI destinations within the EU to include more peripheral, crisis-stricken countries and whether it shifted industries to support China's economic realignment.
3) The theoretical framework draws on Dunning's OLI paradigm and concepts of 'leapfrogging' to explain Chinese motivations for investing abroad such as seeking new markets and improving efficiency across borders.
Labor migration from Eastern Europe and the member countries of Commonwealth of Independent States (CIS) to the Western countries became an important socio-economic issue. Since political systems and the nature of border management in these regions, migrations turned out to be a very complex and unpredictable issue. The purpose of this study is to analyze the region specific actors, practices and policies of migration in the Eastern countries, the possible scenarios and demographic consequences of the future migration flows. In order to address this issue properly, some of the complexities of labor migration phenomenon in the region are uncovered.
Authored by: Xavier Chojnicki, Ainura Uzagalieva
Published in 2008
This paper analyses the effect of the EU enlargement process on income convergence among regions in the EU and in the Eastern neighbourhood of the EU. The data used is NUTS II regions in the EU and Oblasts' of Russia over the period 1996-2004. The estimation techniques used take into account both regional and spatial heterogeneity. The main findings are that the regional income differences are reduced within EU15. The income convergence within the EU is mainly driven by reductions in the differences across countries rather than by a reduction in regional differences within countries. When differences in initial conditions in the regions are controlled for by fixed regional effects there are strong evidences of convergence among regions in all studied country groups.
Authored by: Fredrik Wilhelmsson
Published in 2009
The global food price shock of 2006-2008 has particularly affected poorer strata of populations in several developing countries. In Egypt and some other countries it has put food subsidy schemes to the test. This paper develops two comparable computable general equilibrium models for Egypt and Ukraine which are used to simulate direct and indirect impacts of the food price surge and various policy options on the performance of the main macroeconomic indicators as well as on poverty outcomes. The results illustrate the limited ability of realistic policy responses to mitigate negative social consequences of an external price shock. Food import tariff cuts are a partial remedy faring better than other analysed options. Furthermore, the Egyptian system of food subsidies needs substantial reforms limiting the related fiscal burden and improving the targeting of the poor population.
Authored by: Soheir Aboulenein, Heba El Laithy, Omneia Helmy, Hanaa Kheir-El-Din, Liudmyla Kotusenko, Maryla Maliszewska, Dina Mandour, Wojciech Paczynski
Published in 2010
In the paper, the author analyses three years of the rule of the left-wing SYRIZA in Greece.
She discusses the basis of the party’s historical victory in the parliamentary elections in 2015.
In addition, she analyses the course of negotiations with Greek creditors regarding the third
economic adjustment programme for Greece. She also points out the necessity of gradual resignation from anti-austerity agenda and social reactions against introduced reforms. In the final
part, the author of the paper outlines the current challenges of the Greek government.
In this paper, we analyze the demographic and economic consequences of endogenous migrations flows over the coming decades in a multi-regions overlapping generations general equilibrium model (INGENUE 2) in which the world is divided in ten regions. Our analysis offers a global perspective on the consequences of international migration flows. The value-added of the INGENUE 2 model is that it enables us to analyze the effects of international migration on both the destination and the origin regions. A further innovation of our analysis is that international migration is treated as endogenous.
In a first step, we estimate the determinants of migration in an econometric model. We show, in particular, that the income differential is one of the key variables explaining migration flows. In a second step, we endogenize migration flows in the INGENUE 2 model. In order to do so, we use the econometrically estimated relationships between demographic and income developments in the INGENUE model, which enables us to project long-run migration flows and to improve on projections of purely demographic models.
Authored by: Vladimir Borgy, Xavier Chojnicki, Gelles Le Garrec, Cyrille Schwellnus
Published in 2009
Transform-Europe Productive Transformation discussion paper 2015Dr. Jean-Claude Simon
This document discusses the need for an alternative industrial policy and productive transformation in Europe to address social and environmental challenges. It analyzes the European Commission's Jobs, Growth and Investment Package (known as the Juncker Plan) as an insufficient response that relies too heavily on unrealistic leveraging of funds without meaningful new public investment. The document argues that austerity policies have deepened crises across Europe and that a more ambitious investment plan is needed to stimulate the real economy, reindustrialize Europe, and support its transition to more sustainable models of development.
The effect of Economic Conditions on Net Greek MigrationEmily Marshall
This document provides an introduction, literature review, model specification, data description, empirical results, and conclusions regarding a study analyzing the effect of economic conditions on Greek net migration from 1991-2014. The study uses econometric techniques to model the relationship between key economic indicators like GDP, inflation, unemployment, interest rates, and dummy variables for economic crisis and EU membership, on net migration. The initial linear model showed some issues which were partially addressed by transforming it to a log-log model. Overall, the study found GDP and unemployment were statistically significant in explaining migration, and concluded that strengthening Greece's economic position could help stabilize net migration flows.
1) This document is a bachelor thesis that examines how China's foreign direct investment behavior in the European Union changed after the 2009 European sovereign debt crisis.
2) It develops hypotheses about whether China diversified its FDI destinations within the EU to include more peripheral, crisis-stricken countries and whether it shifted industries to support China's economic realignment.
3) The theoretical framework draws on Dunning's OLI paradigm and concepts of 'leapfrogging' to explain Chinese motivations for investing abroad such as seeking new markets and improving efficiency across borders.
Labor migration from Eastern Europe and the member countries of Commonwealth of Independent States (CIS) to the Western countries became an important socio-economic issue. Since political systems and the nature of border management in these regions, migrations turned out to be a very complex and unpredictable issue. The purpose of this study is to analyze the region specific actors, practices and policies of migration in the Eastern countries, the possible scenarios and demographic consequences of the future migration flows. In order to address this issue properly, some of the complexities of labor migration phenomenon in the region are uncovered.
Authored by: Xavier Chojnicki, Ainura Uzagalieva
Published in 2008
This paper analyses the effect of the EU enlargement process on income convergence among regions in the EU and in the Eastern neighbourhood of the EU. The data used is NUTS II regions in the EU and Oblasts' of Russia over the period 1996-2004. The estimation techniques used take into account both regional and spatial heterogeneity. The main findings are that the regional income differences are reduced within EU15. The income convergence within the EU is mainly driven by reductions in the differences across countries rather than by a reduction in regional differences within countries. When differences in initial conditions in the regions are controlled for by fixed regional effects there are strong evidences of convergence among regions in all studied country groups.
Authored by: Fredrik Wilhelmsson
Published in 2009
The global food price shock of 2006-2008 has particularly affected poorer strata of populations in several developing countries. In Egypt and some other countries it has put food subsidy schemes to the test. This paper develops two comparable computable general equilibrium models for Egypt and Ukraine which are used to simulate direct and indirect impacts of the food price surge and various policy options on the performance of the main macroeconomic indicators as well as on poverty outcomes. The results illustrate the limited ability of realistic policy responses to mitigate negative social consequences of an external price shock. Food import tariff cuts are a partial remedy faring better than other analysed options. Furthermore, the Egyptian system of food subsidies needs substantial reforms limiting the related fiscal burden and improving the targeting of the poor population.
Authored by: Soheir Aboulenein, Heba El Laithy, Omneia Helmy, Hanaa Kheir-El-Din, Liudmyla Kotusenko, Maryla Maliszewska, Dina Mandour, Wojciech Paczynski
Published in 2010
In the paper, the author analyses three years of the rule of the left-wing SYRIZA in Greece.
She discusses the basis of the party’s historical victory in the parliamentary elections in 2015.
In addition, she analyses the course of negotiations with Greek creditors regarding the third
economic adjustment programme for Greece. She also points out the necessity of gradual resignation from anti-austerity agenda and social reactions against introduced reforms. In the final
part, the author of the paper outlines the current challenges of the Greek government.
Foreign direct investment environment and economic growthnakije.kida
Abstract: This paper examines the models of economic growth and the dynamic interaction between
models from the Solow Model to New Endogenous Models. Long-term relationship of these models
is noticed to have been related in terms of causality. Model comparisons were made to examine their
dynamics which is not as complex as reflected. Results that growth is led by endogenous or
exogenous factors are not verified to be absolute but relative. Results indicate that FDI affect the
economic growth in many developing countries, but there are also many cases (developed countries)
that show that economic growth has led to a long term increase of FDI flow. It is also verified that the
impact of FDI on the environment is relative, based on the fact that there are exogenous factors that
may affect the reduction of externalities. Causal link among FDI, economic growth and their impact
on the environment makes the endogenous models be analysed with the dynamics, through which is
shown best which is the “cause-consequence” factor, that causes gaps of concepts and practices in
economic growth and environmental concerns.
International sport events are not only a phenomenon of sport, but also a tourist one. A simultaneous presence of sport and tourism phenomena which is visible in international sports spectacles allows the realization of various functions. Aim of this work was to show the political and economic function in international sports events on the chosen example of Football Championship organization in France in 2016.
'Troika austerity and alternatives in Greece', MOC Brussels lectureStavros Mavroudeas
This document provides an overview and analysis of the Greek economic crisis. It discusses:
1) What is not the Greek crisis - it was not caused by exorbitant wage increases as claimed by some, as Greek wages consistently lagged behind productivity.
2) What is the Greek crisis - it is a systemic structural crisis caused by a falling profitability rate for Greek capital and an unequal relationship between Greece and more developed EU economies that deindustrialized Greece.
3) What are the troika Economic Adjustment Programs - the austerity programs implemented since 2010 that have caused GDP to fall 26% and unemployment to surge, while failing to reduce debt as projected due to recession. Alternative strategies like renegotiation
The document discusses Europe's economic growth and competitiveness from both supply-side and demand-side perspectives. It analyzes productivity growth trends before and after the Great Recession using new data. It finds that while Europe's aggregate productivity growth was slow, demand for European exports and integration in global supply chains increased jobs and income from manufacturing and services. The paper aims to reconcile these perspectives and project growth over the next decade based on labor, capital and productivity contributions. It groups European economies by their structural issues and trajectories emerging from the crisis. Finally, it outlines scenarios for Europe's future growth performance along supply and demand dimensions.
2016_02 The evolution of immigration and asylum policy in Luxembourg - insigh...Bénédicte Souy-Cour
1) The IMPALA project aims to provide comparable measures of immigration policies across countries and over time through detailed coding of laws and regulations. It identifies different "entry tracks" which correspond to specific ways of entering a country within the main categories of economic migration, family reunification, student migration, humanitarian migration, and others.
2) Luxembourg has traditionally received immigrants from other European countries but is now highly diverse. It relies heavily on immigrants, who make up 45.9% of its population and 71% of its workforce.
3) Luxembourg's immigration policy evolved over time, starting in the 1970s with separate tracks for EU and non-EU economic migrants. Reforms in 2008 increased tracks to 15 to
Chief Assistant Professor Dr. Ivan Krumov Todorov holds several degrees related to finance and economics. He currently works as a Chief Assistant Professor of Finance at the South-West University "Neofit Rilski" in Blagoevgrad, Bulgaria where he teaches various courses. His research focuses on macroeconomics, European economic integration, and convergence between EU member states and the euro area. He has published extensively in Bulgarian and international journals and participated in several research projects.
This document discusses regional variations in spending rates of the European Social Fund (ESF) in France during the 2007-2013 programming period. The author hypothesizes that differences in regional absorption capacities, including administrative, institutional, and financial capacities, may explain the variations.
The author presents a four-step methodological framework to study the problem. First, they analyze literature on EU regional policy and the concept of absorption capacity. Second, they examine spending rates across French regions in July 2012. Third, they conduct qualitative interviews with regional actors. Finally, they develop a conceptual framework to define and operationalize absorption capacity in the French ESF context. The author aims to determine whether absorption capacity can explain regional spending differences or if alternative
This document provides an overview of the impact of international labor migration on Moldova based on previous research. It discusses the main effects of labor migration such as remittances sent home which have increased yearly and had a positive impact on Moldova's banking system and GDP. Labor migration has also impacted Moldova's employment levels, population demographics, and socially vulnerable groups. While the crisis of 2008-2010 did not result in mass returns of Moldovan migrants, their remittances have helped reduce unemployment in Moldova and improve living standards.
Tourism is an activity that can improve main macroeconomic indicators. The opportunities for sustainable tourism development and the preservation of its competitiveness is largely influenced by the quality of the environment and the preservation of goods and resources. The paper will examine the impact of the number of international arrivals and receipts from international tourism on the GDP per capita for 2009-2015 and its impact on unemployment and the human development index as the selected component of sustainable development. Based on the relationship between these values, the basic relations between the selected indicators will be identified. The results will include all aspects, establish priorities, concrete proposals - strategic projects that can be realized in the coming period in order to increase the number of tourists and tourism revenues, which would affect the economic growth and development of the Republic of Serbia.
Emerging market economies were major beneficiaries of the economic boom before 2007. More recently, they have become victims of the global financial crisis. Their future development depends, to a large extent, on global economic prospects. Today the global economy and the European economy are much more integrated and interdependent than they were ten or twenty years ago. Every country must recognize its limited economic sovereignty and must be prepared to deal with the consequences of global macroeconomic fluctuations.
The statistical data for 2009 provides a mixed picture with respect to the impact of the crisison various groups of countries and individual economies. On average, Central and Eastern Europe experienced a smaller output decline than the Euro area and the entire EU while the CIS, especially its European part, contracted more dramatically. However, there was a deep differentiation within each country group. Looking globally, richer countries, which are more open to trade and in which the banking sector plays a larger role and which rely more on external financing, suffered more than less sophisticated economies, which are less dependent on trade and credit (especially from external sources). With some exceptions, the previous good growth performance helped rather than handicapped countries in the CEE and CIS regions in the crisis year of 2009.
The post-crisis recovery has been rather modest and incomplete. It remains vulnerable to new shocks (like the Greek Fiscal crisis), the danger of sovereign default and other uncertainties. Full post-crisis recovery and increasing potential growth will require far going economic and institutional reforms on both national, regional (e.g., EU) and global levels.
Authored by: Marek Dąbrowski
Published in 2010
Impact of Economic Development of the Czech Republic in the Years 2005-2012 ...inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
1. The document outlines 4 alternative strategies for exiting the Greek economic crisis: 1) remaining in the EU and implementing austerity programs, 2) remaining in the EU but renegotiating austerity programs, 3) exiting the Eurozone but remaining in the EU, and 4) fully disengaging from the EU.
2. It argues that a Marxist structural explanation of the crisis sees its fundamental causes in problems of production and imperialist exploitation within the EU.
3. A full disengagement from the EU offers the only coherent strategy that can radically restructure Greece's economy in a way that benefits workers.
This study addresses the connection between reorganization and unemployment in the labour market. Reorganization of regional labour markets measured by simultaneous gross migration flows lowers the unemployment rate, based on evidence from a panel of Finnish regions. However, reorganization is shown to be unrelated to long-term unemployment.
1) The document summarizes theories and typologies of migration, including definitions of migration types like internal, international, and labor migration. It discusses theories that have emerged over time to explain migration patterns.
2) The document then presents a model of preparedness for return migration, including levels of skills, social capital, and financial capital that influence job prospects for returnees. It also describes different reintegration assistance schemes for refugees and highly skilled migrants.
3) The remainder of the document analyzes case studies of return migration of graduates from Ghana and Cameroon, finding that returnees faced varying levels of success in obtaining employment depending on factors like skills, social networks, and access to financial support through reintegration programs
This paper focuses on roots of strain in the European Monetary Union (EMU). It argues that there is need for a thorough reform of the governance structure of the Union in conjunction with radical changes in the regulation and supervision of financial markets. Financial intermediation has gone astray in recent decades and entailed a big bubble in the industrialized world. Waves of financial deregulation have enhanced systemic risks, via speculative behavior and growing inter-connectedness. Moreover, the EMU was sub-optimal from its debut and competitiveness gaps did not diminish against the backdrop of its inadequate policy and institutional design. The euro zone crisis is not related to fiscal negligence only; over-borrowing by the private sector and poor lending by banks, as well as a one-sided monetary policy, also explain this debacle. The EMU needs to complement its common monetary policy with solid fiscal/budget underpinnings. Fiscal rules and sanctions are necessary, but not sufficient. A common treasury (a federal budget) is needed in order to help the EMU absorb shocks and forestall confidence crises. A joint system of regulation and supervision of financial markets should operate. Emergency measures have to be comprehensive and acknowledge the necessity of a lender of last resort; they have to combat vicious circles. Structural reforms and EMU level policies are needed to enhance competitiveness in various countries and foster convergence. The EU has to work closely with the US and other G20 members in order to achieve a less unstable global financial system.
Authored by: Daniel Daianu
Published in 2012
The Eurozone crisis mobilises an appreciable amount of the attention of politicians and the public, with calls for a decisive defence of the euro, because the single currency’s demise is said to be the beginning of the end of the EU and Single European Market. In our view, preserving the euro may result in something completely different than expected: the disintegration of the EU and the Single European Market rather than their further strengthening. The fundamental problem with the common currency is individual countries’ inability to correct their external exchange rates, which normally constitutes a fast and efficient adjustment instrument, especially in crisis times.
Europe consists of nation states that constitute the major axes of national identity and major sources of government’s legitimisation. Staying within the euro zone may sentence some countries – which, for whatever reason, have lost or may lose competitiveness – to economic, social and civilizational degradation, and with no way out of this situation. This may disturb social and political cohesion in member countries, give birth to populist tendencies that endanger the democratic order, and hamper peaceful cooperation in Europe. The situation may get out of control and trigger a chaotic break-up of the euro zone,
threatening the future of the whole EU and Single European Market.
In order to return to the origins of European integration and avoid the chaotic break-up of the euro zone, the euro zone should be dismantled in a controlled manner. If a weak country were to leave the euro zone, it would entail panic and a banking system collapse. Therefore we opt for a different scenario, in which the euro area is slowly dismantled in such a way that the most competitive countries or group of such countries leave the euro zone. Such a step would create a new European currency regime based on national currencies or currencies serving groups of homogenous countries, and save EU institutions along with the Single European Market.
This paper has been also published in "German Economic Review" (Volume 14, Issue 1, pages 31–49, February 2013)
Authored by: Stefan Kawalec and Ernest Pytlarczyk
1) Public wages account for a substantial portion of government spending in the euro area, averaging nearly a quarter, though there is significant cross-country variation.
2) The share of the labor force employed by the public sector also varies widely across countries, from under 10% in Germany to over 20% in France and Finland.
3) Compared to the early 1990s, the public wage bill has generally increased as a percentage of total government spending in most euro area countries.
This document provides background on private sector development in developing countries. It discusses trends in privatization revenues globally and by region since 1988. Privatization activity was highest in Latin America in the 1990s and Eastern Europe/Central Asia in the 2000s, while the Middle East/North Africa region saw more modest activity. Research generally finds private ownership outperforms state ownership. However, privatization alone does not guarantee improved performance - competition, strong market institutions, and the type of private owner are also important factors. The document will examine private sector trends in Latin America, post-communist Europe/Asia, and the Middle East/North Africa region.
The document analyzes economic performance during the 2008-2009 global financial crisis across different regions and countries. It finds that while growth rates declined worldwide, output actually declined and turned negative on average only in advanced economies and Central and Eastern European countries. Other regions like Asia, Latin America and Africa saw similar or higher growth rates compared to pre-crisis periods. The crisis most severely impacted advanced nations, decreasing their share of global GDP, while Asia increased its share. The document emphasizes looking at changes in income levels rather than just growth rates to better assess crisis impacts on welfare.
The Philippines has a long history of labor migration since the 1970s, supplying skilled and unskilled workers to more developed countries. As of 2004, an estimated 8.1 million or 10% of Filipinos were working abroad in almost 200 countries. Economic factors like income disparities and limited career growth, as well as political unrest and frequent natural disasters have driven migration. The Philippines is now one of the largest labor exporters in the world and a top recipient of remittances, providing protections for migrant workers through laws and advocacy groups.
Globalization has led to significant economic and cultural changes in India over the past few decades. Economically, India has seen growth in sectors like IT and BPO outsourcing, as well as increased foreign direct investment and trade. Culturally, exposure to foreign media and goods has changed lifestyles and perceptions, especially among youth, though it has also been accompanied by some social issues like deterioration of values. Overall, globalization has presented both opportunities and challenges for India's economy and society.
Foreign direct investment environment and economic growthnakije.kida
Abstract: This paper examines the models of economic growth and the dynamic interaction between
models from the Solow Model to New Endogenous Models. Long-term relationship of these models
is noticed to have been related in terms of causality. Model comparisons were made to examine their
dynamics which is not as complex as reflected. Results that growth is led by endogenous or
exogenous factors are not verified to be absolute but relative. Results indicate that FDI affect the
economic growth in many developing countries, but there are also many cases (developed countries)
that show that economic growth has led to a long term increase of FDI flow. It is also verified that the
impact of FDI on the environment is relative, based on the fact that there are exogenous factors that
may affect the reduction of externalities. Causal link among FDI, economic growth and their impact
on the environment makes the endogenous models be analysed with the dynamics, through which is
shown best which is the “cause-consequence” factor, that causes gaps of concepts and practices in
economic growth and environmental concerns.
International sport events are not only a phenomenon of sport, but also a tourist one. A simultaneous presence of sport and tourism phenomena which is visible in international sports spectacles allows the realization of various functions. Aim of this work was to show the political and economic function in international sports events on the chosen example of Football Championship organization in France in 2016.
'Troika austerity and alternatives in Greece', MOC Brussels lectureStavros Mavroudeas
This document provides an overview and analysis of the Greek economic crisis. It discusses:
1) What is not the Greek crisis - it was not caused by exorbitant wage increases as claimed by some, as Greek wages consistently lagged behind productivity.
2) What is the Greek crisis - it is a systemic structural crisis caused by a falling profitability rate for Greek capital and an unequal relationship between Greece and more developed EU economies that deindustrialized Greece.
3) What are the troika Economic Adjustment Programs - the austerity programs implemented since 2010 that have caused GDP to fall 26% and unemployment to surge, while failing to reduce debt as projected due to recession. Alternative strategies like renegotiation
The document discusses Europe's economic growth and competitiveness from both supply-side and demand-side perspectives. It analyzes productivity growth trends before and after the Great Recession using new data. It finds that while Europe's aggregate productivity growth was slow, demand for European exports and integration in global supply chains increased jobs and income from manufacturing and services. The paper aims to reconcile these perspectives and project growth over the next decade based on labor, capital and productivity contributions. It groups European economies by their structural issues and trajectories emerging from the crisis. Finally, it outlines scenarios for Europe's future growth performance along supply and demand dimensions.
2016_02 The evolution of immigration and asylum policy in Luxembourg - insigh...Bénédicte Souy-Cour
1) The IMPALA project aims to provide comparable measures of immigration policies across countries and over time through detailed coding of laws and regulations. It identifies different "entry tracks" which correspond to specific ways of entering a country within the main categories of economic migration, family reunification, student migration, humanitarian migration, and others.
2) Luxembourg has traditionally received immigrants from other European countries but is now highly diverse. It relies heavily on immigrants, who make up 45.9% of its population and 71% of its workforce.
3) Luxembourg's immigration policy evolved over time, starting in the 1970s with separate tracks for EU and non-EU economic migrants. Reforms in 2008 increased tracks to 15 to
Chief Assistant Professor Dr. Ivan Krumov Todorov holds several degrees related to finance and economics. He currently works as a Chief Assistant Professor of Finance at the South-West University "Neofit Rilski" in Blagoevgrad, Bulgaria where he teaches various courses. His research focuses on macroeconomics, European economic integration, and convergence between EU member states and the euro area. He has published extensively in Bulgarian and international journals and participated in several research projects.
This document discusses regional variations in spending rates of the European Social Fund (ESF) in France during the 2007-2013 programming period. The author hypothesizes that differences in regional absorption capacities, including administrative, institutional, and financial capacities, may explain the variations.
The author presents a four-step methodological framework to study the problem. First, they analyze literature on EU regional policy and the concept of absorption capacity. Second, they examine spending rates across French regions in July 2012. Third, they conduct qualitative interviews with regional actors. Finally, they develop a conceptual framework to define and operationalize absorption capacity in the French ESF context. The author aims to determine whether absorption capacity can explain regional spending differences or if alternative
This document provides an overview of the impact of international labor migration on Moldova based on previous research. It discusses the main effects of labor migration such as remittances sent home which have increased yearly and had a positive impact on Moldova's banking system and GDP. Labor migration has also impacted Moldova's employment levels, population demographics, and socially vulnerable groups. While the crisis of 2008-2010 did not result in mass returns of Moldovan migrants, their remittances have helped reduce unemployment in Moldova and improve living standards.
Tourism is an activity that can improve main macroeconomic indicators. The opportunities for sustainable tourism development and the preservation of its competitiveness is largely influenced by the quality of the environment and the preservation of goods and resources. The paper will examine the impact of the number of international arrivals and receipts from international tourism on the GDP per capita for 2009-2015 and its impact on unemployment and the human development index as the selected component of sustainable development. Based on the relationship between these values, the basic relations between the selected indicators will be identified. The results will include all aspects, establish priorities, concrete proposals - strategic projects that can be realized in the coming period in order to increase the number of tourists and tourism revenues, which would affect the economic growth and development of the Republic of Serbia.
Emerging market economies were major beneficiaries of the economic boom before 2007. More recently, they have become victims of the global financial crisis. Their future development depends, to a large extent, on global economic prospects. Today the global economy and the European economy are much more integrated and interdependent than they were ten or twenty years ago. Every country must recognize its limited economic sovereignty and must be prepared to deal with the consequences of global macroeconomic fluctuations.
The statistical data for 2009 provides a mixed picture with respect to the impact of the crisison various groups of countries and individual economies. On average, Central and Eastern Europe experienced a smaller output decline than the Euro area and the entire EU while the CIS, especially its European part, contracted more dramatically. However, there was a deep differentiation within each country group. Looking globally, richer countries, which are more open to trade and in which the banking sector plays a larger role and which rely more on external financing, suffered more than less sophisticated economies, which are less dependent on trade and credit (especially from external sources). With some exceptions, the previous good growth performance helped rather than handicapped countries in the CEE and CIS regions in the crisis year of 2009.
The post-crisis recovery has been rather modest and incomplete. It remains vulnerable to new shocks (like the Greek Fiscal crisis), the danger of sovereign default and other uncertainties. Full post-crisis recovery and increasing potential growth will require far going economic and institutional reforms on both national, regional (e.g., EU) and global levels.
Authored by: Marek Dąbrowski
Published in 2010
Impact of Economic Development of the Czech Republic in the Years 2005-2012 ...inventionjournals
International Journal of Humanities and Social Science Invention (IJHSSI) is an international journal intended for professionals and researchers in all fields of Humanities and Social Science. IJHSSI publishes research articles and reviews within the whole field Humanities and Social Science, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
1. The document outlines 4 alternative strategies for exiting the Greek economic crisis: 1) remaining in the EU and implementing austerity programs, 2) remaining in the EU but renegotiating austerity programs, 3) exiting the Eurozone but remaining in the EU, and 4) fully disengaging from the EU.
2. It argues that a Marxist structural explanation of the crisis sees its fundamental causes in problems of production and imperialist exploitation within the EU.
3. A full disengagement from the EU offers the only coherent strategy that can radically restructure Greece's economy in a way that benefits workers.
This study addresses the connection between reorganization and unemployment in the labour market. Reorganization of regional labour markets measured by simultaneous gross migration flows lowers the unemployment rate, based on evidence from a panel of Finnish regions. However, reorganization is shown to be unrelated to long-term unemployment.
1) The document summarizes theories and typologies of migration, including definitions of migration types like internal, international, and labor migration. It discusses theories that have emerged over time to explain migration patterns.
2) The document then presents a model of preparedness for return migration, including levels of skills, social capital, and financial capital that influence job prospects for returnees. It also describes different reintegration assistance schemes for refugees and highly skilled migrants.
3) The remainder of the document analyzes case studies of return migration of graduates from Ghana and Cameroon, finding that returnees faced varying levels of success in obtaining employment depending on factors like skills, social networks, and access to financial support through reintegration programs
This paper focuses on roots of strain in the European Monetary Union (EMU). It argues that there is need for a thorough reform of the governance structure of the Union in conjunction with radical changes in the regulation and supervision of financial markets. Financial intermediation has gone astray in recent decades and entailed a big bubble in the industrialized world. Waves of financial deregulation have enhanced systemic risks, via speculative behavior and growing inter-connectedness. Moreover, the EMU was sub-optimal from its debut and competitiveness gaps did not diminish against the backdrop of its inadequate policy and institutional design. The euro zone crisis is not related to fiscal negligence only; over-borrowing by the private sector and poor lending by banks, as well as a one-sided monetary policy, also explain this debacle. The EMU needs to complement its common monetary policy with solid fiscal/budget underpinnings. Fiscal rules and sanctions are necessary, but not sufficient. A common treasury (a federal budget) is needed in order to help the EMU absorb shocks and forestall confidence crises. A joint system of regulation and supervision of financial markets should operate. Emergency measures have to be comprehensive and acknowledge the necessity of a lender of last resort; they have to combat vicious circles. Structural reforms and EMU level policies are needed to enhance competitiveness in various countries and foster convergence. The EU has to work closely with the US and other G20 members in order to achieve a less unstable global financial system.
Authored by: Daniel Daianu
Published in 2012
The Eurozone crisis mobilises an appreciable amount of the attention of politicians and the public, with calls for a decisive defence of the euro, because the single currency’s demise is said to be the beginning of the end of the EU and Single European Market. In our view, preserving the euro may result in something completely different than expected: the disintegration of the EU and the Single European Market rather than their further strengthening. The fundamental problem with the common currency is individual countries’ inability to correct their external exchange rates, which normally constitutes a fast and efficient adjustment instrument, especially in crisis times.
Europe consists of nation states that constitute the major axes of national identity and major sources of government’s legitimisation. Staying within the euro zone may sentence some countries – which, for whatever reason, have lost or may lose competitiveness – to economic, social and civilizational degradation, and with no way out of this situation. This may disturb social and political cohesion in member countries, give birth to populist tendencies that endanger the democratic order, and hamper peaceful cooperation in Europe. The situation may get out of control and trigger a chaotic break-up of the euro zone,
threatening the future of the whole EU and Single European Market.
In order to return to the origins of European integration and avoid the chaotic break-up of the euro zone, the euro zone should be dismantled in a controlled manner. If a weak country were to leave the euro zone, it would entail panic and a banking system collapse. Therefore we opt for a different scenario, in which the euro area is slowly dismantled in such a way that the most competitive countries or group of such countries leave the euro zone. Such a step would create a new European currency regime based on national currencies or currencies serving groups of homogenous countries, and save EU institutions along with the Single European Market.
This paper has been also published in "German Economic Review" (Volume 14, Issue 1, pages 31–49, February 2013)
Authored by: Stefan Kawalec and Ernest Pytlarczyk
1) Public wages account for a substantial portion of government spending in the euro area, averaging nearly a quarter, though there is significant cross-country variation.
2) The share of the labor force employed by the public sector also varies widely across countries, from under 10% in Germany to over 20% in France and Finland.
3) Compared to the early 1990s, the public wage bill has generally increased as a percentage of total government spending in most euro area countries.
This document provides background on private sector development in developing countries. It discusses trends in privatization revenues globally and by region since 1988. Privatization activity was highest in Latin America in the 1990s and Eastern Europe/Central Asia in the 2000s, while the Middle East/North Africa region saw more modest activity. Research generally finds private ownership outperforms state ownership. However, privatization alone does not guarantee improved performance - competition, strong market institutions, and the type of private owner are also important factors. The document will examine private sector trends in Latin America, post-communist Europe/Asia, and the Middle East/North Africa region.
The document analyzes economic performance during the 2008-2009 global financial crisis across different regions and countries. It finds that while growth rates declined worldwide, output actually declined and turned negative on average only in advanced economies and Central and Eastern European countries. Other regions like Asia, Latin America and Africa saw similar or higher growth rates compared to pre-crisis periods. The crisis most severely impacted advanced nations, decreasing their share of global GDP, while Asia increased its share. The document emphasizes looking at changes in income levels rather than just growth rates to better assess crisis impacts on welfare.
The Philippines has a long history of labor migration since the 1970s, supplying skilled and unskilled workers to more developed countries. As of 2004, an estimated 8.1 million or 10% of Filipinos were working abroad in almost 200 countries. Economic factors like income disparities and limited career growth, as well as political unrest and frequent natural disasters have driven migration. The Philippines is now one of the largest labor exporters in the world and a top recipient of remittances, providing protections for migrant workers through laws and advocacy groups.
Globalization has led to significant economic and cultural changes in India over the past few decades. Economically, India has seen growth in sectors like IT and BPO outsourcing, as well as increased foreign direct investment and trade. Culturally, exposure to foreign media and goods has changed lifestyles and perceptions, especially among youth, though it has also been accompanied by some social issues like deterioration of values. Overall, globalization has presented both opportunities and challenges for India's economy and society.
This document discusses the effects of globalization on women's labor. It provides details on how women have gained more access to factory work and education, but often face lower pay and limited career advancement compared to men. The document also examines the growing industries of transnational factories and domestic work, noting that while they provide important jobs for women, the conditions tend to be difficult with long hours and low wages. Issues of gender, class, and ethnicity shape women's experiences in the global labor market.
Small - International Labor - Amy, Casey, CrystalAmanda DeCardy
This document discusses issues facing migrant workers and their children in China. It notes that in 2005, half of migrant laborers earned only 800 RMB per month. Many migrant children lack access to proper education. The document also describes efforts by organizations like Roots and Shoots to help migrant communities through programs providing physical education, health services, and advocacy. It aims to raise awareness of the challenges migrant families face and encourage support for initiatives improving their lives and opportunities.
This study aimed to determine the effect of economic growth on labor migration in the Philippines from 1987-2010. The researchers found that labor migration fluctuated from 1987-1990 and decreased from 1991-2000, before increasing and decreasing from 2001-2005. Government spending had the highest impact on labor migration, while exports had a significant effect though other factors like investment, imports, and government spending were insignificant. The researchers recommended that the Philippines increase exports to create more jobs and lessen the rate of labor migration.
Presented at a one day workshop jointly organized by Indira Gandhi Institute of Development Research (IGIDR), International Food Policy Research Institute (IFPRI), Cornell University, with funding from International Initiative for Impact Evaluation (3ie) titled 'Implementation of MGNREGA in India: A Review of Impacts for Future Learning'.
The main objective of the workshop was take stock of the current scenario of MGNREGA, assess the impacts it has made over the past decade and emerge with knowledge as to the areas under MGNREGA that still need to be studied and can be opened up with more research.
John Gokongwei Jr. is one of the most powerful industrialists in the Philippines, having built a multibillion-peso conglomerate called JG Summit Holdings from humble beginnings. He was born in China but migrated as a child to the Philippines to escape turmoil. After experiencing hardship and tragedy that left his family destitute, he worked as a young trader but faced near drowning in a shipwreck. He rebuilt his capital through trading after WWII and established his first company, later successfully diversifying into manufacturing various products and establishing corporations like Universal Robina Corporation that expanded his business empire overseas and now employs 30,000 people.
SR: John L. Gokongwei Jr. The Path of Entrepreneurship by Marites Khansermadz_h05
John L. Gokongwei Jr.'s great-grandfather migrated from China to the Philippines in the late 1800s and established a trading company. Gokongwei was born in 1926 in China but grew up in the Philippines. After his father's death, he started his entrepreneurial career at age 15, riding his bicycle to nearby towns to sell goods. He later used boats to expand his trade and established his first import company in 1945. Gokongwei founded Universal Robina Corporation in 1956 after the government imposed import restrictions. The company grew to include branded food and beverage products and expanded globally. Gokongwei is known for his values of hard work and philanthropy through organizations like the Gok
Henry Sy is a Filipino businessman who founded SM, one of the largest retail conglomerates in the Philippines. He was born in China in 1923 and immigrated to the Philippines at age 12, where he helped his father's small grocery store. Sy grew his business over decades, establishing the Shoe Mart store in 1958, then building the first SM Mall in 1985. Today, SM owns over 40 malls in the Philippines and abroad, and Sy has a net worth of over $9 billion, making him the richest person in the Philippines for the past 5 years. Sy's business interests now extend beyond retail to include banking, real estate development, and other industries.
Henry Sy (age 81) and John Gokongwei (age 81) are two of the wealthiest businessmen in the Philippines, both with net worth over $1 billion. While private about their personal lives, both are known to be very hard working and take brief vacations for business or rejuvenation. They credit their success to principles like perseverance, family values, innovation, and a long-term vision for building their companies.
This document discusses the experiences of Filipino migrant domestic workers. It first provides background on domestic work in the Philippines, noting that over 1% of Filipinos work as domestic workers domestically or abroad. It then profiles "Elena", a Filipino woman who worked as a domestic helper in various countries for 13 years, most recently in Italy from 2004-2007. Elena entered Italy irregularly without a work contract and lived in a dormitory, working long hours cleaning multiple houses per day for low hourly wages. While she earned more than in previous jobs, she received no benefits or protections as an undocumented worker. The document examines the challenges faced by returning migrant domestic workers in the Philippines.
This document discusses labor migration and regional integration in Asia Pacific beyond national borders. It notes that while migration has long occurred, nation states often restrict labor movement between regions for protectionist reasons. Knowledge-based economies attract skilled workers across borders. Regional trade agreements like TPP could facilitate greater labor mobility, recognizing its current reality. The document argues that limiting labor movement hinders integrated markets and ignores the role of labor in the global economy. APEC could study labor migration and develop policies to liberalize it similarly to capital, in line with its goals of human resource development and economic cooperation across the region.
Henry Sy is a Filipino businessman who founded SM, one of the largest retail conglomerates in the Philippines. He was born in China in 1923 and immigrated to the Philippines at age 12, where he helped his father's small grocery store. Sy grew his business over decades, establishing the Shoe Mart store in 1958, then building the first SM Mall in 1985. Today, SM owns over 40 malls in the Philippines and has interests in retail, banking, real estate, and other industries, making Sy the richest person in the country for the past 5 years.
This document discusses brain drain, which is the emigration of trained and talented individuals from developing countries to developed ones. It outlines the main characteristics of brain drain, including large flows of skilled workers like engineers and scientists from a small number of developing countries to developed countries. The document then covers the history of brain drain, reasons for it like lack of opportunities in home countries and better pay abroad, and case studies of brain drain from countries like India to the United States. Both positive and negative effects of brain drain are presented, with negatives including loss of human capital and investment for home countries.
The Philippine executive branch is headed by the President, who is elected to a 6-year term. The President oversees numerous executive departments and agencies that each have specific responsibilities. Key departments include Agriculture, Budget and Management, Education, Energy, Environment, Finance, Foreign Affairs, Health, Interior and Local Government, Justice, Labor, National Defense, Public Works, Social Welfare, Science and Technology, Tourism, Trade and Industry, and Transportation. Local governments are organized into barangays, municipalities, cities, and provinces to better deliver services. Constitutional commissions like the Civil Service and Elections commissions also play important oversight and administrative roles.
Big John:The Life Story of John Gokongwei Jr.Jivanee Abril
The document discusses the benefits of exercise for mental health. Regular physical activity can help reduce anxiety and depression and improve mood and cognitive functioning. Exercise causes chemical changes in the brain that may help protect against mental illness and improve symptoms.
Henry Sy is the richest person in the Philippines according to Forbes with a net worth of $9.1 billion. He came to the Philippines from China at age 12 and started his business by opening a small shoe store. His SM Group has grown tremendously and is now the largest retailer and shopping mall developer in the Philippines. Through hard work and business expansion, Sy's net worth has tripled over the past 5 years. He has groomed his children to take over leadership positions in the various SM business affiliates, ensuring the continued success and growth of the SM Group.
John Gokongwei Jr. is a Chinese-Filipino businessman and the third richest person in the Philippines as of 2010, with a net worth of $1.5 billion. He has holdings in various industries including telecommunications, financial services, petrochemicals, power generation, aviation, and agriculture. Gokongwei had a humble upbringing and started his first business, a secondhand goods store called Amasia, after his father's death to support his family. He grew his business empire through hard work and risk-taking, establishing major companies like Universal Corn Products, JG Summit Holdings, Cebu Pacific Air, and Universal Robina Corporation. Gokongwei faced many challenges but transformed them into opportunities
Henry Sy is a Chinese-Filipino businessman who founded SM Investments Corporation and built the SM Group, one of the largest companies in the Philippines. He was born in Fujian, China in 1924 and immigrated to the Philippines at age 12, where he helped his father run a small store and later opened his own shoe store. Through hard work and opportunism, he grew his business into a retail empire with over 40 shopping malls across the country. He has an estimated net worth of $8 billion and is considered the richest man in the Philippines.
Labor migration from Eastern Europe and the member countries of Commonwealth of Independent States (CIS) to the Western countries became an important socio-economic issue. Since political systems and the nature of border management in these regions, migrations turned out to be a very complex and unpredictable issue. The purpose of this study is to analyze the region specific actors, practices and policies of migration in the Eastern countries, the possible scenarios and demographic consequences of the future migration flows. In order to address this issue properly, some of the complexities of labor migration phenomenon in the region are uncovered.
Authored by: Xavier Chojnicki, Ainura Uzagalieva
Published in 2008
Pension systems and reforms are critically influenced by demographic developments that are increasingly compared across countries to identify common issues and trends. For demographic projections researchers across the world rely on those produced by the United Nations; for Europe the demographic projections by Eurostat form the basis of the periodic aging report by the EU Commission. While these projections are technically well done the underlying assumptions for the demographic drivers – fertility, mortality and migration – in the central variants are limited and are largely flawed. Worse, they risk offering a wrong picture about the likely future developments and the relevant alternatives. This paper investigates the assumptions of the demographic drivers by UN and Eurostat, compares it with those by national projections in Portugal and Spain, and offers a review of alternative, recent and cutting edge approaches to project demographic drivers that go beyond the use of past demographic developments. They suggest that economic and other socio-economic developments have a main bearing on future trends in fertility, mortality and migration. And they support the assessment that the UN/Eurostat projected re-increase in fertility rates may not take place, that the increase in life expectancy may be much larger, that the future flows of net migrants to EU countries may be much higher and rising. The resulting overall underestimation of population aging has a bearing on the financial sustainability of the pension systems and reform choices, a topic to be explored in the next papers.
This paper analyses the spatial distribution of economic activity in the European Union at NUTS2 level over the 2001-2010 period. The aim of the study is twofold: (i) to provide descriptive evidence of the agglomeration distribution in Europe and its evolution over time across countries; (ii) to identify the nature of agglomeration and the factors that determine its level, with particular attention paid to the socio-ecological transformation occurring in Europe.
The study concludes that: a) the changes in agglomeration are sensitive to demographic transformations taking place; b) the ecological transformation has a mixed effect, depending on each country; c) significant differences are observed between new and old Member States; the crisis has had a significant influence on agglomeration but only in Western Europe.
Authored by: Izabela Styczynska and Constantin Zaman
This document summarizes several studies that have estimated the potential migration flow from Turkey to the European Union. Some studies used error correction and gravity models to forecast migration levels based on historical data. One study estimated that Turkish migration to Germany could reach 3.5 million people by 2030 under free movement. Another study used a computable general equilibrium model to estimate that 2.7 million Turks could permanently migrate to the EU in the long term. Other studies forecasted migration levels ranging from 0.5 to 4.4 million depending on the methodology and assumptions used. Most studies indicated higher migration would occur under a scenario of free labor movement between Turkey and the EU.
This document summarizes a book titled "Opening the Door? Immigration and Integration in the European Union" published in January 2012. The book contains chapters from 24 academics and experts covering immigration and integration policies and debates in 13 EU countries and the EU as a whole. This policy brief extracts the key analysis and policy recommendations from the book. The analysis section examines economic immigration, asylum, illegal immigration, integration, and policy design related to these issues across European countries.
This document summarizes a policy brief on immigration and integration in the European Union based on analysis from a book published by the Centre for European Studies. The policy brief examines debates around economic immigration, asylum, and illegal immigration based on country-specific chapters from the book. It finds that views on these issues differ significantly between countries and that asylum systems and policies on illegal immigration are inconsistent across EU member states.
This document summarizes a policy brief on immigration and integration in the European Union based on analysis from a book published by the Centre for European Studies. The policy brief examines debates around economic immigration, asylum, and illegal immigration based on country-specific chapters from the book. It finds that views on these issues differ significantly between countries and that asylum systems and policies on illegal immigration are inconsistent across EU member states.
This document summarizes a book titled "Opening the Door? Immigration and Integration in the European Union" published in January 2012. The book contains chapters from 24 academics and experts covering immigration and integration policies and debates in 13 EU countries and the EU as a whole. This policy brief extracts the key analysis and policy recommendations from the book. The analysis section examines economic immigration, asylum, illegal immigration, integration, and policy design related to these issues across European countries.
Externalisation of EU immigration policy: a raised drawbridge?Arsenia Nikolaeva
“One refugee is a novelty, ten refugees are boring and a hundred refugees are a menace”.
(Greenhill 2010:1) A look at the externalisation of EU immigration policy and the effect it has on the number of asylum seekers entering the EU borders.
The economic-impact-of-brexit-induced-reductions-in-migrationAzhar Manarbekova
This document analyzes the potential economic impacts of Brexit-induced reductions in migration to the UK. It first forecasts migration levels under different Brexit scenarios. It then reviews literature on the impacts of migration on economic growth, productivity, employment and wages. Finally, it estimates the potential economic effects of Brexit-related migration reductions on UK GDP, employment and wages over the short and long term, finding reductions in GDP and wage growth but limited impacts on employment levels.
EU IMMIGRATION POLICIES:CHALLENGES AND LESSONSJose Magalhaes
Presentation delivered by the Secretário de Estado Adjunto e da Administração Interna (Assistant Minister of the Interior) de Portugal in Japan, in the 19th EU-Japan Journalists Conference, Hakone, April 2007
This document summarizes changes in the economic geography of Europe from 1995-2005 based on regional income data from 29 countries. It finds that domestic regional inequality increased substantially in eastern Europe, while central Europe saw little change or reductions in inequality. Darker shaded areas on the map indicate higher increases in regional disparities. The analysis focuses on exploring the east-west dimension of economic development on the continent and how international integration affects regions within countries.
This paper examines the economic impact of refugees on five European countries (Austria, France, Germany, Switzerland, and the UK) using an augmented Solow growth model and econometric analysis. The paper reviews literature on both the potential positive and negative economic effects of refugees. It then presents the augmented Solow growth model used, which includes refugees as a determinant of economic growth. The model derives transition equations for physical and human capital and steady state levels of output. Monthly data on economic and refugee indicators for the five European countries over multiple decades will be used in a panel data analysis to empirically estimate the effect of refugees on economic development indicators. The results will help determine whether refugees hurt or help the economies of host countries.
Ethnic Entrepreneurship – Case study: Stuttgart, GermanyThink Ethnic
This document provides information about ethnic entrepreneurship in Stuttgart, Germany. It begins with background on the CLIP network, which brings together over 30 European cities to share best practices on local integration policies. The document then provides the following information about Stuttgart:
1) Stuttgart has a population of around 600,000 people, with 39% having a migration background from over 170 countries. The largest migrant groups come from former Yugoslavia, Turkey, Italy, Greece, and Poland.
2) Stuttgart has a strong industrial economy focused on automotive, mechanical, and electrical engineering. While industry still plays a large role, the service sector now employs 79% of residents compared to 20% in manufacturing.
3) The document
2014 09 30 seniors final report revised versiondomenicosarleti
This document discusses developing tourism for seniors in Europe, particularly during low and medium seasons. It aims to set up recommendations to facilitate and increase senior tourist travel within Europe and from other countries. Specifically:
- Seniors represent a large and growing demographic in Europe with potential for more tourism. However, many seniors do not travel internationally or travel only domestically.
- Increasing senior tourism could help address issues like seasonality and underutilization of tourism infrastructure. Off-peak seasons appeal more to seniors' travel patterns.
- The document recommends further research on seniors' travel preferences, barriers, and spending to better understand the market and develop suitable tourism products and services. Existing knowledge and good practices could be built upon
This document provides an overview of a research project examining social enterprises in Central and Eastern Europe and the Commonwealth of Independent States. It finds that while economic growth has occurred in the region following transitions in the 1990s, social problems remain including high unemployment, inequality, and gaps in basic service delivery. Vulnerable groups have been particularly impacted. The report explores how social enterprises, which aim to achieve both social and economic goals, can help address these issues through activities like providing services, generating employment, and building social cohesion. It presents case studies and recommendations but notes the potential role of social enterprises is still underdeveloped in the region compared to Western Europe. The research sought to raise awareness and understanding of social enterprises to help reduce poverty and
Similar to CASE Network Studies and Analyses 359 - Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighbourhood Regions (20)
The report examines the social and economic drivers and impact of circular migration between Belarus and Poland, Slovakia, and the Czech Republic. The core question the authors sought to address was how managing circular migration could, in the long term, help to optimise labour resources in both the country of origin and the destination countries. In the pages that follow, the authors of the report present the current and forecasted labour market and demographic situation in their respective countries as well as the dynamics and characteristics of short-term labour migration flows between Belarus and Poland, Slovakia, and the Czech Republic, concentrating on the period since 2010. They also outline and discuss related policy responses and evaluate prospects for cooperation on circular migration.
Podręcznik został opracowany w celu przekazania trenerom i nauczycielom podstawowej wiedzy, która może być przydatna w prowadzeniu szkoleń promujących pracę rejestrowaną. Prezentuje on z jednej strony korzyści z pracy rejestrowanej, z drugiej – potencjalne koszty związane z pracą nierejestrowaną. W pierwszej kolejności informacje te przedstawiono w odniesieniu do pracowników najemnych (rozdział 2), podkreślając w sposób szczególny to, że negatywne konsekwencje pracy nierejestrowanej są ponoszone przez całe życie. Ze względu na specyficzną sytuację cudzoziemców pracujących w Polsce konsekwencje ponoszone przez tę grupę opisano oddzielnie (rozdział 3). Ponadto zaprezentowano skutki dotyczące pracodawców z szarej strefy z wyodrębnieniem tych, którzy zatrudniają cudzoziemców (rozdział 4). Uzupełnieniem przedstawionych informacji jest opis działań podejmowanych przez państwo w celu ograniczenia zjawiska pracy nierejestrowanej w Polsce (rozdział 5) oraz prowadzonych w Wielkiej Brytanii, czyli w kraju będącym liderem w walce z szarą strefą (rozdział 6).
European countries face a challenge related to the economic and social consequences of their societies’ aging. Specifically, pension systems must adjust to the coming changes, maintaining both financial stability, connected with equalizing inflows from premiums and spending on pensions, and simultaneously the sufficiency of benefits, protecting retirees against poverty and smoothing consumption over their lives, i.e. ensuring the ability to pay for consumption needs at each stage of life, regardless of income from labor.
One of the key instruments applied toward these goals is the retirement age. Formally it is a legally established boundary: once people have crossed it – on average – they significantly lose their ability to perform work (the so-called old-age risk). But since the 1970s, in many developed countries the retirement age has become an instrument of social and labor-market policy. Specifically, in the 1970s and ‘80s, an early retirement age was perceived as a solution allowing a reduction in the supply of labor, particularly among people with relatively low competencies who were approaching retirement age, which is called the lump of labor fallacy. It was often believed that people taking early retirement freed up jobs for the young. But a range of economic evidence shows that the number of jobs is not fixed, and those who retire don’t in fact free up jobs. On the contrary, because of higher spending by pension systems, labor costs rise, which limits the supply of jobs. In general, a good situation on the labor market supports employment of both the youngest and the oldest labor force participants. Additionally, a lower retirement age for women was maintained, which resulted to a high degree from cultural conditions and norms that are typical for traditional societies.
Until now, the banking sector has been one of the strong points of Poland’s economy. In contrast to banks in the U.S. and leading Western European economies, lenders in Poland came through the 2008 global financial crisis without a scratch, without needing state financial support. But in recent years the industry’s problems have been growing, creating a threat to economic growth and gains in living standards.
For an economy’s productivity to increase, funds can’t go to all companies evenly, and definitely shouldn’t go to those that are most lacking in funds, but to those that will use them most efficiently. This is true of total external financing, and thus funding both from the banking sector and from parabanks, the capital market and funds from public institutions. In Poland, in light of the relatively modest scale of the capital market, banks play a clearly dominant role in external financing of companies. This is why the author of this text focuses on the bank credit allocation efficiency.
The author points out that in the very near future, conditions will emerge in Poland which – as the experience of other countries shows – create a risk of reduced efficiency of credit allocation to business. Additionally, in Poland today, bank lending to companies is to a high degree being replaced by funds from state aid, which reduces the efficiency of allocation of external funds to companies (both loans and subsidies), as allocation of government subsidies is not usually based on efficiency. This decline in external financing allocation efficiency may slow, halt or even reverse the process, that has been uninterrupted for 28 years, of Poland’s convergence, i.e. the narrowing of the gap in living standards between Poland and the West.
The economic characteristics of the COVID-19 crisis differ from those of previous crises. It is a combination of demand- and supply-side constraints which led to the formation of a monetary overhang that will be unfrozen once the pandemic ends. Monetary policy must take this effect into consideration, along with other pro-inflationary factors, in the post-pandemic era. It must also think in advance about how to avoid a policy trap coming from fiscal dominance.
This paper is organized as follows: Chapter 2 deals with the economic characteristics of the COVID-19 pandemic and its impact on the effectiveness of the monetary policy response measures undertaken. In Chapter 3, we analyse the monetary policy decisions of the ECB (and other major CBs for comparison) and their effectiveness in achieving the declared policy goals in the short term. Chapter 4 is devoted to an analysis of the policy challenges which may be faced by the ECB and other major CBs once the pandemic emergency comes to its end. Chapter 5 contains a summary and the conclusions of our analysis.
Purpose: This paper tries to identify the wage gap between informal and formal workers and tests for the two-tier structure of the informal labour market in Poland.
Design/methodology/approach: I employ the propensity score matching (PSM) technique and use data from the Polish Labour Force Survey (LFS) for the period 2009–2017 to estimate the wage gap between informal and formal workers, both at the means and along the wage distribution. I use two definitions of informal employment: a) employment without a written agreement and b) employment while officially registered as unemployed at a labour office. In order to reduce the bias resulting from the non-random selection of
individuals into informal employment, I use a rich set of control variables representing several individual characteristics.
Findings: After controlling for observed heterogeneity, I find that on average informal workers earn less than formal workers, both in terms of monthly earnings and hourly wage. This result is not sensitive to the definition of informal employment used and is
stable over the analysed time period (2009–2017). However, the wage penalty to informal employment is substantially higher for individuals at the bottom of the wage distribution, which supports the hypothesis of the two-tier structure of the informal labour market in Poland.
Originality/value: The main contribution of this study is that it identifies the two-tier structure of the informal labour market in Poland: informal workers in the first quartile of the wage distribution and those above the first quartile appear to be in two partially different segments of the labour market.
This document provides a comparative analysis of the rule of law and its impact on economic development in Poland and Germany. It finds that while both countries have strong rule of law frameworks de jure, there are significant differences de facto, with Polish firms showing less trust in the state and courts compared to German firms. Empirical analysis suggests higher levels of investment and economic development in Germany can be partially attributed to firms' greater recognition of the rule of law's ability to reduce transaction costs. Erosion of the rule of law in Poland since 2015 has likely negatively impacted investment and capital accumulation compared to Germany.
The report analyzes the VAT gap in the EU-28 member states in 2018. It finds that the total VAT gap in the EU was an estimated €137 billion, representing 12.2% of the total VAT liability. This is an increase compared to 2017, when the gap was €117 billion or 11.2% of the total liability. The report examines VAT revenue, total VAT liability, and VAT gap estimates for each member state from 2014 to 2018. It also conducts econometric analysis to identify factors influencing VAT gap levels across countries.
The euro is the second most important global currency after the US dollar. However, its international role has not increased since its inception in 1999. The private sector prefers using the US dollar rather than the euro because the financial market for US dollar-denominated assets is larger and deeper; network externalities and inertia also play a role. Increasing the attractiveness of the euro outside the euro area requires, among others, a proactive role for the European Central Bank and completing the Banking Union and Capital Market Union.
Forecasting during a strong shock is burdened with exceptionally high uncertainty. This gives rise to the temptation to formulate alarmist forecasts. Experiences from earlier pandemics, particularly those from the 20th century, for which we have the most data, don’t provide a basis for this. The mildest of them weakened growth by less than 1 percentage point, and the worst, the Spanish Flu, by 6 percentage points. Still, even the Spanish Flu never caused losses on the order of 20% of GDP – not even where it turned out to be a humanitarian disaster, costing the lives of 3-5% of the population. History suggests that if pandemics lead to such deep losses at all, it’s only in particular quarters and not over a whole year, as economic activity rebounds. The strength of that rebound is largely determined by economic policy. The purpose of this work is to describe possible scenarios for a rebound in Polish economic growth after the epidemic.
A separate issue, no less important, is what world will emerge from the current crisis. In the face of the 2008 financial crisis, White House Chief of Staff Rahm Emanuel said: “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.” Such changes can make the economy and society function better than before the crisis. Unfortunately, the opportunities created by the global financial crisis were squandered. Today’s task is more difficult; the scale of various problems has expanded even more. Without deep structural and institutional changes, the world will be facing enduring social and economic problems, accompanied by long-term stagnation.
"Many brilliant prophecies have appeared for the future of the EU and our entire planet. I believe that Europe, in its own style, will draw pragmatic conclusions from the crisis, not revolutionary ones; conclusions that will allow us to continue enjoying a Europe without borders. Brussels will demonstrate its usefulness; it will react ably and flexibly. First of all, contrary to the deceitful statements of members of the Polish government, the EU warned of the threats already in 2021. Secondly, already in mid-March EU assistance programs were ready, i.e. earlier than the PiS government’s “shield” program. The conclusion from the crisis will be a strengthening of all the preventive mechanisms that allow us to recognize threats and react in time of need. Research programs will be more strongly directed toward diagnosing and treating infectious diseases. Europe will gain greater self-sufficiency in the area of medical equipment and drugs, and the EU – greater competencies in the area of the health service, thus far entrusted to the member states. The 2021-27 budget must be reconstructed, to supplement the priority of the Green Deal with economic stimulus programs. In this way structural funds, which have the greatest multiplier effect for investment and the labor market, may return to favor. So once again: an addition, as a conclusion from the crisis, and not a reinvention of the EU," writes Dr. Janusz Lewandowski the author of the 162nd mBank-CASE seminar Proceeding.
Dla wielu rodaków europejskość Polski jest oczywista, trudno jest im nawet wyobrazić sobie, jak kształtowałyby się losy naszego kraju bez uczestnictwa w integracji europejskiej. Szczególnie młode pokolenie traktuje osiągnięty przez nas dzięki uczestnictwie w Unii ogromny postęp cywilizacyjny jako coś danego i naturalnego. Jednak świadomość tego, jaki był nasz punkt wyjścia, jaką przeszliśmy drogę i jak przyczyniły się do tego unijne działania oraz jakie wynikały z tego korzyści powinna nam stale towarzyszyć. Bez tej świadomości, starannego weryfikowania faktów i docenienia naszych osiągnięć grozi nam uleganie niesprawdzonym argumentom przeciwników integracji europejskiej i popełnienie nieodwracalnych błędów. Dla tych, którzy chcą poznać te fakty, przygotowany został raport "Nasza Europa. 15 lat Polski w Unii Europejskiej". Podjęto w nim ocenę 15 lat członkostwa Polski z perspektywy doświadczeń procesu integracji, z jego barierami i sukcesami, a także wyzwaniami przyszłości.
Raport jest wynikiem pracy zbiorowej licznych ekspertów z różnych dziedzin, od wielu lat analizujących wielowymiarowe efekty działania instytucji UE oraz współpracy z krajami członkowskimi na podstawie europejskich wartości i mechanizmów. Autorzy podsumowują korzyści członkostwa Polski w Unii Europejskiej na podstawie faktów, nie stroniąc jednakże od własnych ocen i refleksji.
This report is the result of the joint work of a number of experts from various fields who have been - for many years – analysing the multidimensional effects of EU institutions and cooperation with Member States pursuant to European values and mechanisms. The authors summarise the benefits of Poland’s membership in the EU based on facts; however, they do not hide their own views and reflections. They also demonstrate the barriers and challenges to further European integration.
This report was prepared by CASE, one of the oldest independent think tanks in Central and Eastern Europe, utilising its nearly 30 years of experience in providing objective analyses and recommendations with respect to socioeconomic topics. It is both an expression of concern about Poland’s future in the EU, as well as the authors’ contribution to the debate on further European integration.
Poland’s new Employee Capital Plans (PPK) scheme, which is mandatory for employers, started to be implemented in July 2019. The article looks at the systemic solutions applied in the programme from the perspective of the concept of the simultaneous reconstruction of the retirement pension system. The aim is to present arguments for and against the project from the point of view of various actors, and to assess the chances of success for the new system. The article offers a detailed study of legal solutions, an analysis of the literature on the subject, and reports of institutions that supervise pension funds. The results of this analysis point to the lack of cohesion between certain solutions of the 1999 pension reform and expose a lack of consistency in how the reform was carried out, which led to the eventual removal of the capital part of the pension system. The study shows that additional saving for old age is advisable in the country’s current demographic situation and necessary for both economic and social reasons. However, the systemic solutions offered by the government appear to be chiefly designated to serve short-term state interests and do not create sufficient incentives for pension plan participants to join the programme.
The document summarizes the evolution of the Belarusian public sector from a command economy to state capitalism. It discusses how the Belarusian economic model has changed over time, moving from a quasi-Soviet system based on state property and central planning, to a more flexible hybrid model where the public sector still dominates the economy. The paper analyzes the role and characteristics of the state sector in Belarus and how it has developed since independence. It considers various theoretical perspectives for understanding statist economies like Belarus, but concludes that a new multidisciplinary approach is needed to fully capture the dual nature of the Belarusian economic system.
Belarusian economy has been stagnating in 2011-2015 after 15 years of a high annual average growth rate. In 2015, after four years of stagnation, the Belarusian economy slid into a recession, its first since 1996, and experienced both cyclical and structural recessions. Since 2015, the Belarusian government and the National Bank of Belarus have been giving economic reforms a good chance thanks to gradual but consistent actions aimed at maintaining macroeconomic stability and economic liberalization. It seems that the economic authorities have sustained more transformation efforts during 2015-2018 than in the previous 24 years since 1991.
As the relative welfare level in Belarus is currently 64% compared to the Central and Eastern Europe (CEE) countries average, Belarus needs to build stronger fundaments of sustainable growth by continuing and accelerating the implementation of institutional transformation, primarily by fostering elimination of existing administrative mechanisms of inefficient resource allocation. Based on the experience of the CEE countries’ economic transformation, we highlight five lessons for the purpose of the economic reforms that Belarus still faces today: keeping macroeconomic stability, restructuring and improving the governance of state-owned enterprises, developing the financial market, increasing taxation efficiency, and deepening fiscal decentralization.
Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the reputation of central banks. Thus, central banks should not try to bring inflation back to the targeted level of 2%. Rather, they should revise the inflation target downwards and publicly explain the rationale for such a move. Risks to the independence of central banks come from their additional mandates (beyond price stability) and populist politics.
Estonia has Europe’s most transparent tax system (while Poland is second-to-last, in 35th place), and is also known for its pioneering approach to taxation of legal persons’ income. Since 2000, payers of Estonian corporate tax don’t pay tax on their profits as long as they don’t realize them. In principle, this approach should make access to capital easier, spark investment by companies and contribute to faster economic growth. Are these and other positive effects really noticeable in Estonia? Have other countries followed in this country’s footsteps? Would deferment of income tax be possible and beneficial for Poland? How would this affect revenue from tax on corporate profits? Would investors come to see Poland as a tax haven? Does the Estonian system limit tax avoidance and evasion, or actually the opposite? Is such a system fair? Are intermediate solutions possible, which would combine the strengths or limit the weaknesses of the classical and Estonian models of profit tax? These questions are discussed in the mBank-CASE seminar Proceeding no. 163, written by Dmitri Jegorov, deputy general secretary of the Estonian Finance Ministry, who directs the country’s tax and customs policy, Dr. Anna Leszczyłowska of the Poznań University of Economics and Business and Aleksander Łożykowski of the Warsaw School of Economics.
The trade war between the U.S. and China began in March 2018. The American side raised import duties on aluminum and steel from China, which were later extended to other countries, including Canada, Mexico and the EU member states. This drew a negative reaction from those countries and bilateral negotiations with the U.S. In June 2018 America, referring to Section 301 of its 1974 Trade Act, raised tariffs to 25% on 818 groups of products imported from China, arguing that the tariff increase was a response to years of theft of American intellectual property and dishonest trade practices, which has caused the U.S. trade deficit.
Will this trade war mean the collapse of the multilateral trading system and a transition to bilateral relationships? What are the possibilities for increasing tariffs in light of World Trade Organization rules? Can the conflict be resolved using the WTO dispute-resolution mechanism? What are the consequences of the trade war for American consumers and producers, and for suppliers from other countries? How high will tariffs climb as a result of a global trade war? How far can trade volumes and GDP fall if the worst-case scenario comes to pass? Professor Jan J. Michałek and Dr. Przemysław Woźniak give answers to these questions in the mBank-CASE Seminar Proceeding No. 161.
This Report has been prepared for the European Commission, DG TAXUD under contract TAXUD/2017/DE/329, “Study and Reports on the VAT Gap in the EU-28 Member States” and serves as a follow-up to the six reports published between 2013 and 2018.
This Study contains new estimates of the Value Added Tax (VAT) Gap for 2017, as well as updated estimates for 2013-2016. As a novelty in this series of reports, so called “fast VAT Gap estimates” are also presented the year immediately preceding the analysis, namely for 2018. In addition, the study reports the results of the econometric analysis of VAT Gap determinants initiated and initially reported in the 2018 Report (Poniatowski et al., 2018). It also scrutinises the Policy Gap in 2017 as well as the contribution that reduced rates and exemptions made to the theoretical VAT revenue losses.
More from CASE Center for Social and Economic Research (20)
1. Elemental Economics - Introduction to mining.pdfNeal Brewster
After this first you should: Understand the nature of mining; have an awareness of the industry’s boundaries, corporate structure and size; appreciation the complex motivations and objectives of the industries’ various participants; know how mineral reserves are defined and estimated, and how they evolve over time.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby...Donc Test
Solution Manual For Financial Accounting, 8th Canadian Edition 2024, by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting, 8th Canadian Edition by Libby, Hodge, Verified Chapters 1 - 13, Complete Newest Version Solution Manual For Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Ebook Download Stuvia Solution Manual For Financial Accounting 8th Canadian Edition Pdf Solution Manual For Financial Accounting 8th Canadian Edition Pdf Download Stuvia Financial Accounting 8th Canadian Edition Pdf Chapters Download Stuvia Financial Accounting 8th Canadian Edition Ebook Download Stuvia Financial Accounting 8th Canadian Edition Pdf Financial Accounting 8th Canadian Edition Pdf Download Stuvia
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
CASE Network Studies and Analyses 359 - Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighbourhood Regions
1.
2. Labor migration: macroeconomic and
demographic outlook for Europe and
neighbourhood regions
Vladimir Borgy (a,b), Xavier Chojnicki (b,c)
(a) Banque de France, (b) CEPII
(c) EQUIPPE, Universities of Lille
30 April 2008
This paper is based on research carried out in the EU 6th framework funded re-search
project EU Eastern Neighbourhood: Economic Potential and Future Development
(ENEPO). The authors gratefully acknowledge European Commission funding under the
ENEPO project. This paper reects the opinions of the authors and do not necessarily
express the views of the institutions they belong to. We thank Frédéric Docquier and
Abdeslam Marfouk for transmitting their dataset. We are grateful to Marek Dabrowski,
Maryla Maliszewska, Toman Omar Mahmoud, Ainura Uzagalieva, Cyrille Schwellnus and
Martine Carré for useful comments and suggestions. The usual disclaimers apply. Corre-spondence:
xavier.chojnicki@univ-lille2.fr
1
4. Abstract
In this paper, we assess the demographic and economic consequences of mi-grations
in Europe and neighbourhood countries. In order to do so, we rely
on a multi-region world overlapping generations model (INGENUE2). The
rich modeling framework of this multi-regions model allows us to put into
connection migration with the triangular relationship between population
aging, pension reforms and international capital markets. With this model,
we are also able to quantify the demographic and economic consequences of
migration ows on both the regions receiving and losing migrants. Our anal-ysis
is based on a very detailed migration scenario between Western Europe
and the Neighborhood regions constructed by taking into account both the
current situation and some prospective empirical scenarios. Our quantita-tive
results shed some light on the long term consequences of migration on
regions that are not at the same stage in the ageing process. Concerning the
regions receiving migrants, despite some improvement of their public pen-sion
system, it appears that our realistic migration scenario does not oset
the eect of ageing in these regions, leaving room for pension reforms. Con-cerning
the regions losing migrants, the adverse economic consequences of
emigration appear to be all the more important than the region is advanced
in the ageing process (and is already suering from a declining population).
J.E.L. classication number: F21, C68, J61, H55.
Keywords: CGEM, Migration, International capital ows, Neighbourhood
policy
2
5. 1 Introduction
For the past few years, the pace of international migration has accelerated and
this phenomenon is likely to further develop in the coming decades as a part
of the world globalization process. During the 20th century, Western Europe
has been one of the major host region of migrants with the United-States.
At the end of the last century, about 30 million foreigners are established
there. Migration backgrounds are diverse but net immigration ows con-tribute
signicantly to population growth in Western Europe, in many cases
overtaking natural population increases in recent years. Despite their recent
status as immigration countries, the largest foreign national stocks continue
to be from the traditional labor recruitment countries of Southern Europe
(Italy, Portugal, Spain and Greece). Turkey and Mediterranean countries
complete the list of traditional migration ows to Western Europe.
The recent period is characterized by new migrations, especially from East-ern
and Central European regions and Commonwealth of Independent States
(CIS). Indeed, migration ows between and within these regions have in-creased
after the Soviet Union began to disintegrate. In the early 1990's, the
annual number of ocially recorded net migrants from Central and East-ern
European countries to Western countries was around 850.000, compared
with less than half this in the three preceding decades (Salt (2005)). The
early period of transition was marked by ethnic and conict-driven migra-tion,
while during the later, as the situation stabilized, migration became
mainly economically motivated. In this respect, migration issues and asso-ciated
policies became an important socio-economic issue both in receiving
and in sending countries. As one of the main channels of interdependency
among economies, immigration is a longstanding concern for policy makers
and has been alternately considered as a challenge or an opportunity for
Western Europe.
Since the frontiers of a larger Europe are not well-dened, it might be rel-evant
to assess the consequences of tighter links between Western Europe
and regions perceived to be in its back yard. One such structural change
is already in motion through the opening to larger ows of migrants from
nearby territories. The Neighbourhood Policy of the European Union could
dene more precisely the migration policy between Europe and some specic
countries. Immigration is one of the policy options amongst the policies to
alleviate the nancial burden on the public retirement system and to sus-tain
the growth rate of the working age population. Some political leaders
seem also ready to embrace the idea that an inux of migrants is the best
way to save the European pension systems by limiting the increase of the
3
6. dependency ratio and the contribution rate.
Future trends in migration could have more substantial demographic conse-quences
than what has been observed in the past. As fertility has fallen below
replacement in Europe, policies to encourage immigration may become an
important means for EU to moderate rates of population decline. The Euro-pean
Union policy strategy on migration issues has been presented in several
ocial publications (see EuropeanCommission (2006), for instance)1. This
question appears all the more crucial that numerous CIS countries (which
constitute good candidates as emigration countries) are very advanced in the
ageing process and are already suering from a declining population.
In order to assess the demographic and economic consequences of migrations
in Europe and neighbourhood countries, we use the INGENUE 2 model 2. The
model describes a multi-region, world model in the spirit of those developed
by Obstfeld Rogo (1996) in which the structure of each regional economy
is similar to that of other applied overlapping generations (OLG) general
equilibrium models (such as Auerbach Kotliko (1987)). The INGENUE
2 model is presented in detail in a technical working paper (see Ingenue
(2007a)) and several scenarios have been analyzed in detail by the INGENUE
Team. Ingenue (2006) analyzed the consequences of sustained technological
catching up in Eastern Europe as well as some specic migration scenario.
Ingenue (2007b) detailed the global consequences of Asian regions catch up
simultaneously with an improvement of the pensions systems in these regions.
In the model, the world is divided into ten regions according to geographi-cal
and demographic criterions. The GDP growth rate of each region relies
mainly on its demographic evolution and on the assumption regarding the
catching up process of total factor productivity. With this general equi-librium
model, we have useful insights on the impact of the asynchronous
ageing processes on international capital ows as well as the interest rates.
We are also able to describe the demographic and economic consequences of
migrations on both the regions receiving and losing migrants. Discussions
on the macroeconomic eects of immigrations have become a focus of policy
and media attention in Western Europe, following the surge in labor force
from new member states as well as neighbourhood regions. To the best of our
knowledge, very few works deal with this question using a general equilibrium
1The issue related to the building of a common policy on labor immigration of the
European Union is presented in detail by Carrera (2007).
2The INGENUE 2 model was developed at CEPII, CEPREMAP and OFCE by
Michel Aglietta (CEPII), Vladimir Borgy (CEPII), Jean Chateau (OECD), Michel Juil-lard
(CEPREMAP), Jacques Le Cacheux (OFCE), Gilles Le Garrec (OFCE) and Vincent
Touzé (OFCE).
4
7. applied approach even if it appears to be a very important issue.
The rich modeling framework of this multi-regions model allows us to put
into connection migration with the triangular relationship between popu-lation
aging, pension reforms and international capital markets that receives
increasing attention in the academic literature, see Brooks (2003), Börsch-
Supan, Ludwig Winter (2006), Aglietta et al. (2007) and Krueger Lud-wig
(2007). The purpose of this strand of the literature is to analyze the
accumulation and the international ows of capital that are induced by the
dierential ageing process in dierent regions of the world.
Most of the existing theoretical and empirical literature on immigration is
based on partial equilibrium models. Computable OLG models with migra-tion
usually consist of closed economy models3. Storesletten (2000) and
Chojnicki, Docquier Ragot (2005) investigate whether a reform of immi-gration
policies could attenuate the scal burden of ageing in the coming
decades. Iakova (2007) and Barrell, FitzGerald Riley (2007) consider the
macroeconomic eects of the migration that followed the enlargement of the
EU in May 2004. Only two studies (Fehr, Jokisch Kotliko (2003, 2004)),
have treated international migration in multi-country open-economy CGE-OLG
models. These papers develop a three countries model (United States,
Europe and Japan) to study the macroeconomic eects of increased immi-gration
on the three countries' pension systems. Even if they use an open
economy framework, the impact of immigration on the sending countries and
on inter-country inequalities are not treated as the regions losing migrants
are not explicitly modeled.
Compared to these studies, our paper oers a global vision of the conse-quences
of international migrations. Indeed, the value-added of the Ingenue
model is that it is able to analyze the eects of international migrations
on both the destination and the origin regions. Consequently, the follow-ing
questions are addressed: what is the impact of migration on economic
growth, capital accumulation consumption, pension schemes and the current
accounts of sending and receiving countries? Can immigration from neigh-bourhood
regions help mitigate the adverse eects of population ageing in
Western Europe?
The rest of the paper is organized as follows. Section 2 describes our de-mographic
model. The macroeconomic model is presented in section 3. The
main results of the baseline path (without migration) are presented in section
4. The economic study of migrations from neighbourhood countries follows
3With the exception of the modeling of inows of workers, the equilibrium of these
OLG models is similar to the benchmark model of Auerbach Kotliko (1987).
5
8. in section 5. Finally, section 6 concludes.
2 Demographics
The World is divided into 10 regions according mainly to geographical and
demographic criteria (Figure 1). These regions are labeled : Western Eu-rope,
Eastern Europe, North America, Latin America, Japan, Mediterranean
World, Eastern Asian World, Africa, Slavic World4. and South Asian World.
The countries included in each region are detailed in Appendix 1. The neigh-bourhood
countries (CIS and Mediterranean countries) are included in 3 re-gions:
the South Asian World (including Kazakhstan and Tajikistan), the
Slavic World (including Russian Federation, Ukraine, Belarus and Republic
of Moldova) and the Mediterranean world (including Armenia, Azerbaijan,
Georgia, Kyrgyzstan, Turkmenistan, Uzbekistan, together with Maghreb and
Middle East countries).
4The countries traditionally included in the slavic area are more numerous than the
ones included in this region of the model. The Slavic world of the model corresponds more
precisely to the East Slavic area (with the exception of Moldova included in this region of
the model).
6
12. 2.1 Population structure and projection method
The period of the model is set to ve years. In each region z, the economy is
populated by 21 overlapping generations who live up to a maximum age of
105. For notation purpose, age is denoted by a 2 [0, . . . , 20]. For instance,
a = 2 corresponds to the individuals aged 10-14. The number of people of
age a at time t is: denoted by Lz
a(t)5. At date t the number of births
(individuals between 0 and 4 years old) is then denoted by Lz
0(t) and total
population alive at time t in the region z is Lz(t) =
P20
a=0 Lz
a(t). Between
ages 15 and 50, women give birth to fraction of children at the beginning of
each period (Figure 2). Our agents die at each age and the probability of
death is one at age 105.
Figure 2: The individual life cycle
15. #
!
Population evolution is calculated according to a standard population pro-jection
method on the basis of historical and prospective UN data. For that
purpose, a simple demographic model has been developed, allowing to gen-erate
projections that are consistent with United-Nations (2001) data. First,
we aggregate the population structure across the countries of each region with
the UN data from 1950 to 1995. Then we project fertility, net migrations
and mortality trends (for both sexes) at the region-aggregate level. This,
together with initial population structures in 1995, allows us to obtain the
evolution of the population at a world level from 2000 until the ending date
5More generally, for any household variable, a subscript a denotes age and an argument
t in parentheses denotes calendar time.
8
16. of the model. With some usual population projection methods, the evolu-tions
of mortality and fertility tables are constructed on the only basis of life
expectancy and global fertility rates evolutions in the future.
At each time, the number of births is equal to:
Lz
0(t) =
X9
a=3
fz
a (t)Lfaz(t)
where Lfaz(t) is the female population of age a at time t and fz
a is the
average age-specic fertility rate. At each time, we calibrate fz
a for the 10
geographical regions so that the number of births matches the UN gures
until 2050.
People could die before 105 years old ; if sa denotes the conditional probability
of surviving between age a and age a+1, the number of age a−1 individuals
then follows :
Lz
a(t) = sz
a−1(t − 1) · Lz
a−1(t − 1) +
X
z
Mz
a (t) for all a 0 (1)
with Mz
a (t) the number of net migrants that enter or leave the country. We
thus have Mz
a (t) 0 in case of immigration and Mz
a (t) 0 in case of
emigration.
For population projections, we then need some process to describe the evo-lution
of {sz
a−1(t − 1)}a0 for t = 2000, . . . , T (for both sexes). For this, we
rst have to set initial and nal mortality tables. The starting tables are
taken from UN data between years 1995 and 2000. The ending table are cho-sen
among UN typical long run mortality tables (from Coale Demeny
(1966)). According to UN methods, we extrapolate future mortality tables
on the basis of an expected trend for life expectancy. We adopt a linear
process of convergence.
In the baseline scenario, we implicitly assume that there is no migration ows
in the future (Mz
a (t) = 0) so that the population evolution is only given
by mortality and fertility assumptions. Then, we build a comprehensive
migratory scenario to analyze the demographic and economic consequences
of migration for Europe and the neighbourhood regions. Unlike fertility and
mortality, which are in transition worldwide from high to low levels in a long
historical process, there is much more uncertainty concerning net migration
(see Alho Borgy (2007)). Therefore, migration projections have no strong
and consistent trend that can serve as the backbone of credible projection
9
17. assumptions for the future, particularly in the case of Eastern Europe and
CIS countries that had recently known crisis migration. For this reason, it
is important to assess migration potential of these regions by analyzing the
main driving forces of the past and recent trends. For that purpose, we use
the migration estimation run by Uzagalieva (2007). Assumptions related to
migratory ows are then developed in details in section 5.
After 2050, the demographic model is calibrated in order for the population to
converge towards a stationary level6. For that purpose, the number of females
entering the population must be equal to the number of outgoing females, i.e.
to the number of deaths. Indeed, when the number of women is constant, the
number of births is constant and the model converges automatically towards
a stationary population.
2.2 Main demographic features of the baseline scenario
Our baseline scenario reproduces UN projections with no migration through
2050. According to our demographic forecasts, the world population reaches
9.3 billions in 2050 and 10.3 billions in 21007. Population of the South Asian
world grows at a sustained pace and reaches 31% of the world population
against 28.3% in 2000 (see Figure 3(a)). Population of the Eastern Asian
world increases at a very low pace between 2030 and its culmination in 2050.
As a consequence, the share of the population of this region decreases during
the rst part of the 21st century (from 27% to 22%). The population of
the African region is growing at the highest pace in our projections given the
high fertility rates that characterize the countries included in this region. The
Mediterranean region is also characterized by a dynamic demography with
a doubling population on the rst half of the century. On the contrary, the
Western European population is relatively stable until 2020 and then clearly
diminishes. This gure is even more pronounced for Eastern Europe and
the Slavic world with a total population that begin to reduce immediately
(respectively -15% and -30% between 2000 and 2050).
A sharp contrast will arise in the rate of growth of the labor force (Figure
3(b)). Without migrations, it will decline throughout the rst half century
in the Slavic world (very fast), Eastern Europe, Western Europe and Japan.
It will decline more moderately in North America (after 2010) and Eastern
Asian world (after 2020). It will decelerate but grow until 2050 in Latin
6This is a technical constraint to satisfy in order to compute the steady state of the
OLG model.
7The historical data (between 1950 and 2000) come from the UN database.
10
18. America, South Asia and the Mediterranean countries. The most atypical
region is Africa where the labor force will hardly decelerate at all. As a
consequence of the dynamism of their working-age population, these regions
will need a lot of capital to equip their numerous workers. As the leading
OECD countries concentrate the largest part of world capital, the growth
regime of the world economy will depend on international capital but also in
a lower extent on labor mobility.
An intergenerational transfer of resources via capital export from the rich age-ing
countries to the labor force growing countries will make the world regions
strongly interdependent. One can see on Figure 3(c) that the proportion of
high savers in total population8 follows a wave pattern that propagates from
one region of the world to the next through the decades. The ratio culmi-nates
rst in Japan as soon as 1995 and remains at a high level until 2030.
Then, North America experiences its maximum in 2025 and Western Europe
in 2030, Eastern Europe, Slavic and Eastern Asian world after this date. All
are regions with declining labor force and thus hamper growth in the future.
On the contrary, the regions found on Figure 3(b) as the potentially fast-growing
regions see a progressive ageing leading to an increase of the high
savers ratio which does not culminate before 2050. It follows that savings
will ow from early high savers to late high savers in the coming decades.
Finally, this ageing phenomenon is resumed on gure 3(d) that presents the
evolution of the old age dependency ratio (retirees in percentage of total
working age population). While the fact of population ageing is common
to all regions (except Africa), extent and timing dier substantially. For
example, this ratio is doubling in the case of Western Europe on the rst
half of the XXIst century and is expected to be almost 100% in 2050 when
it is expected to be only around 43% in the same time in the Mediterranean
world. It should be noted that Eastern Europe and the SlavicWorld are more
severely aected by ageing. The resulting asynchronous demographic ageing
raises numerous issues for pension schemes concerning notably replacement
migrations. Indeed, developed countries have an incentive to increase legal
immigration since this would alleviate the nancial burden on the public
retirement system by limiting the increase of the dependency ratio and the
contribution rate.
8In this OLG model with life cycle behavior, the high saver populations are the cohorts
aged between 45 and 69 years.
11
19. Figure 3: The benchmark demographic results
(a) Population by regions (% of the world
population)
35%
30%
25%
20%
15%
10%
5%
0%
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(b) Working-age population annual growth rate (%)
4%
3%
2%
1%
0%
-1%
-2%
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(c) High savers ratio (age group 45-69 years in % of
total population)
40%
35%
30%
25%
20%
15%
10%
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(d) Dependency ratio (retirees in % of total active
population)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
12
20. 3 INGENUE 2: A long term model for the
world economy
Our economic simulations were made with the computable, general equi-librium,
multi-regional overlapping-generations model INGENUE 29. The
model was initially constructed to assess wealth accumulation and the devel-opment
of pension funds and other forms of retirement saving, in a global
macroeconomic setting, for ten major regions of the world, until 205010. Each
of ten regions is made of four categories of economic agents : the households,
the rms, a ctive world producer of a world intermediate good and a Pay
As You Go (PAYG) retirement pension system11.
3.1 Household behavior
The individual life-cycle of a representative agent is described in Figure 2.
Between ages 0 and 20, our agents are children and are supported by their
parents. Given the specicities of developing countries, we assume that chil-dren
can begin to work at age 10 but their income is included in their parent
income. At age 21, our agents become independent and start working. When
becoming independent, individuals make economic decisions according to the
life cycle hypothesis. A voluntary bequest is left to children at age 80 subject
to survival until 80.
In the budget constraint (see equation 3 in Appendix 2), the expenditures
consist of consumption (including costs of children) and saving in each age
and each period. On the income side there is, rst, the return on accumulated
saving corrected by one-period survival probabilities. Second, there is non-
nancial income that depends on age: labor income (after social security
taxes) adjusted by a region-specic age prole of labor force participation
for people in full labor activity; a mix of labor income and pension benets
for people partially retired (reduced labor activity); full pension benets for
people entirely retired. The lifetime utility (equation 2) is maximized under
the intertemporal budget constraint, taking prices, social contributions and
9For technical features of the new INGENUE 2 model, as well as the baseline scenario
and a sensitivity analysis of the main structural parameters, see Ingenue (2007a).
10For a synthetic view on the global demographic changes issue, see IMF (2004) and
Ingenue (2002a). This issue is also explored in a multi-country model by Börsch-Supan
et al. (2006) and Krueger Ludwig (2007).
11This presentation of the multi-regions model is completed by a technical appendix.
The equations mentioned in this section are presented in detail in appendix 2.
13
21. benets as given (Modigliani (1986)). As Fehr, Jokisch Kotliko (2004),
we do not distinguish between natives and immigrants in the model once the
immigrants have joined the destination country.
3.2 The public sector
The public sector is reduced to a social security department. It is a Pay-
As-You-Go (PAYG) public pension scheme, that is supposed to exist in all
regions of the world. It is nanced by a payroll tax on all labor incomes
and pays pensions to retired households. The regional PAYG systems oper-ate
according to a dened-benet rule. The exogenous parameters are the
retirement age and the replacement ratio. They are region-specic and the
contribution rate is determined so as to balance the budget, period by period
(equation 5).
3.3 The production side and the world capital market
In order to deal with relative price movements of foreign and domestic goods
we assume that the dierent countries produce dierent, imperfectly sub-stitutable
intermediate goods using labor and capital (equation 6). In the
spirit of Backus, Kehoe Kydland (1995), we assume that the domestic
composite nal good of each region is produced according to a combination
of the domestic intermediate good and an homogenous world good imported
by the region from a world market (equation 9). In order to simplify the
exchanges of intermediate goods between regions of the world, this homoge-nous
world good is produced by a ctive world producer as the output of
a combination of all intermediate goods exported by the regions (equation
10).
The depreciation rate is asymmetrically dependent on the ownership ratio,
dened as the ratio of the total wealth of households to the capital stock (see
equation 12). Indeed, rms of indebted countries to the rest of the world
borrow at a higher interest rate than the world interest rate and this indebt-edness
premium is proportional to its nancial market exposure (measured
by the ownership ratio). At equilibrium, the marginal return to capital thus
depends on the net external position. In net creditor regions, home assets
marginal return is equal to the real home interest rate plus the capital de-preciation
rate. In net debtor regions, home assets marginal return is equal
to the real home interest rate plus the capital depreciation rate plus the
indebtedness premium.
14
22. 3.4 Technological catching up
All production functions are augmented by Total Factor Productivity (TFP)
coecients at constant prices which is a synthetic measure of technological
progress for the whole economy. Estimating TFP is an appallingly dicult
task for the ten world regions of the INGENUE 2 model. We dene TFP as
a Hicksian neutral technological progress in a Solow growth model. It means
that there exits a production frontier shifting over time. The level of TFP is
exogenous and grows at a constant rate, in each region. For 1950 until 2000,
the growth rate of TFP is given by historical data. After this date the rate
of growth of the TFP is the result of a given, exogenous growth of 1.1% per
annum in the North American region, supposed to be the technological leader,
and a region-specic exogenous, catching-up factor, reecting international
diusion of technological progress.
In the baseline scenario of the model, three regions have a sustained catching
up process: the takeo in the Eastern Asian and South Asian regions which
had already started in the 1990's is assumed to gain momentum. Eastern
Europe is also assumed to be a fast growing region due to its participation to
the European Union. Figure 4 gathers the proles of TFP in the world regions
of the INGENUE 2 model. Before 2000, the model has been calibrated on the
basis of the international macroeconomic database constructed by Heston,
Summers Aten (2002).
Figure 4: Total Factor Productivity: 1950-2100 (% of North America level)
1.0
0.8
0.6
0.4
0.2
0.0
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
15
23. 4 Baseline path in the case without migration
4.1 Solving the model
The baseline scenario is the outcome of a long and weary process of cali-bration.
To put the model on an acceptable track on the projection phase
starting in 2000, the model computation shall begin at an initial date as far
as in the past as the data permit it. The initialization begins in 1950 where
initial stock of capital, household assets and an age distribution of savings
are estimated. Exogenous variables and parameters are the demographic
proles in each region that are outputs of the upstream demographic model;
the coecients of the TFP determination in intermediary and nal sector of
each region; and the social security policy parameters in each region.
The competitive world equilibrium stems from ve set of equations: intertem-poral
utility maximization of households; intertemporal prot maximization
of rms in intermediate goods sectors; period prot maximization of rms in
nal goods sectors; period prot maximization of the world producer; and
market clearing conditions. The markets for intermediate goods, nal goods,
labor in each region, and the market for the world intermediate good, are
cleared in each period. These equations determine all relative equilibrium
prices expressed in a common numeraire, which is the price of the interme-diate
good in North America. This convention allows us to express values
in constant dollars. Finally, Walras's law implies that the world nancial
market equilibrium is the redundant equation.
4.2 The world economy's baseline transition path
We now turn to our simulated baseline policy transition paths for the 10
regions. The baseline scenario is not easy to depict since it is a dynamic
rational expectations general equilibrium model. Any order of description is
somewhat arbitrary because it could give the false impression of a recursive
causal system of determination between blocks of relations. Here, we only try
to give the main intuitions necessary to understand how the model work (see
Ingenue (2007a, 2007b) for a complete description of the baseline). Results
of the migration scenario will be presented with more details.
16
24. Regional growth
Growth in the world economy is shaped by secular trends in its most struc-tural
long-run determinants, i.e. the change in the demographic structure in
the dierent parts of the world and the diusion of technological progress.
As previously detailed, assumptions regarding technological convergence are
conservative in the baseline scenario. Besides, the parameters that dene
public pension systems perpetuate existing policies in the beginning of the
XXIst century. Therefore the pattern of the GDP regional growth rates
largely follows that of the regional labor force growth rates.
Two characteristics stand out (see Figure 5(a)). Firstly, there is a general
slowdown in growth because the working age population growth rate di-minishes
in all regions except Africa after 2000. Secondly, the dispersion
in the growth rates is almost as large in 2050 as in 2000, because ageing
is a lengthy process with countervailing impacts on the labor force of less-developed
countries. Nevertheless convergence in total factor productivity
has an impact since the dispersion in the growth rates of the labor force is
substantially higher in 2050 than in 2000, while the dispersion in the GDP
growth rates is slightly lower.
North America and Europe have growth proles that partly dier from the
general pattern. In North America, growth decelerates precipitously in the
rst decade after 2000 and stabilized thereafter, following the labor force
and productivity pattern. Europe (West and East) and worse the Slavic
world have a gloomy future. Western Europe follows a similar prole as
North America but at a much lower growth rates. GDP growth decelerates
fast after 2000 until 2030 from 3.2 to 0.7% and stabilizes until 2050. The
slavic world is the region with the lowest growth rate almost throughout the
half-century and ends up in complete stagnation.
Investment and saving
Gross investment rises with net capital accumulation and with replacement,
which is modulated by the change in the rate of depreciation in debtor re-gions.
Therefore in regions with a fast growth of the labor force and high
foreign indebtedness, the rate of gross investment to GDP will increase until
2030.
Net saving in each region is the aggregate of individual savings over the
life cycle. It depends on the demographic structure (high savers ratio and
dependency ratio), on the expectation of future income and on the param-
17
25. eters of PAYG pension systems. Demographic determinants are prevalent.
Regions with the fastest-increasing dependency ratios are the ones with the
fastest-decreasing net saving rates, namely Japan, Western Europe, Eastern
Europe, Slavic world (Figure 5(b)). Meanwhile, this gloomy demographic
factor is compounded with a slow expected progression in income. In the
Eastern Asian, South Asian, South America and the Mediterranean world,
the high saver ratio and the dependency ratio rise in tandem. In the early
decades, while the population is still young, those regions grow faster than
more demographically mature ones. It follows that young people expecting
higher future income indulge in debt, reducing the overall saving rate.
Interest rates and capital ows
According to the model, the world real interest rate declines over the fty
years period. This is due to global ageing. Figures 3(b) and 3(c) show
that the working age population is decelerating or declining while the age
group of high savers is growing in one region after another. As a result,
the world saving-investment balance is tilted more and more towards a lower
interest rate. This downward trend provides the general prole of regional
real interest rates (see Figure 5(c)). The hierarchy of regional real interest
rates is linked to the rate of change of the real exchange rates which regulate
investment and saving ows. The gap between investment and saving is the
current account balance of each region. It is nanced by capital ows whose
amounts are such that yield dierentials between dierent regions cancel out
in every period.
The world nancial equilibrium allocates capital ows so as to nance current
account imbalances. The magnitude of nancial positions is measured by the
ownership ratio which is the ratio of the aggregate wealth accumulated by
households in the region to the capital stock laid out in the region. Hence
a ratio above one is tantamount to a creditor position against the rest of
the world, a ratio less than one to a debtor position. The ownership ratios
are determined by cumulative current account balances. The most striking
feature is the divergent prole of North America (see gure 5(d)). It is due to
an assumed change in household saving behavior. With this structural change
and with a population consistently younger than in Japan and Europe, the
rise in saving in North America is translated into a double improvement in
the current account balance and the ownership ratio.
18
26. Figure 5: The benchmark macroeconomic results
(a) GDP growth rate (in %)
6%
5%
4%
3%
2%
1%
0%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(b) Evolution of net saving (in % of GDP)
30%
25%
20%
15%
10%
5%
0%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(c) Regional interest rates (in %)
9%
8%
7%
6%
5%
4%
3%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(d) Ownership ratio
1.20
1.15
1.10
1.05
1.00
0.95
0.90
0.85
0.80
0.75
0.70
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
19
27. 5 Consequences of migration
We now turn to analyze demographic and economic consequences of migra-tion
from neighbourhood countries into the European Union. For that pur-pose,
an immigration shock is introduced into the model as an increase in the
number of young adults (aged between 21 and 24, i.e. Mz
a (t) = 0 if a6= 4).
After crossing the border, immigrants automatically become natives in an
economic sense, i.e. they have the same preferences and fertility behaviors
as natives and adjust to the productivity of the host region. Furthermore,
as in Storesletten (2000), we assume that immigrants move into receiving
countries without any capital.12 However, this choice seems to play a minor
part in the results since most immigrants actually enter the country before
the age of 30, i.e. at the beginning of the wealth accumulation process.
5.1 Calibration of migration ows compatible with o-
cial gures
Given the regional grouping of the INGENUE2 model, the neighbourhood
regions are including in 3 regions of the model: the Slavic world, the South
Asian World and the Mediterranean World. For the South Asian World, we
only calibrate migration ows for the two CIS countries that are included in
this region: Kazakhstan and Tajikistan. For the Mediterranean World, we
distinguish migration ows from North Africa (Algeria, Egypt, Libya, Mo-rocco,
Tunisia and Western Sahara) and from the CIS Middle East countries
(Armenia, Azerbaijan, Georgia, Kyrgyzstan, Turkmenistan and Uzbekistan).
The Slavic World is composed of the Russian Federation, Ukraine, Belarus
and Moldova.
Evaluation of current migration ows
International migrants are unevenly distributed across world regions. By
2005, 47% of the stock of international migrants were resident in industrial
countries and 53% in developing countries. Here we only focus on migration
that concerns Europe and CIS regions. Western Europe has experienced
net inows of migration for four decades and represents the second major
immigration area with 21% of the total immigrant stock. Eastern Europe
and the former Soviet Union had a stock of migrants of around 15% of total
12These assumptions are necessary to avoid problems of agent heterogeneity that would
complicate the computation of the transitory path.
20
28. stock. Migration in these regions follow a broad biaxial pattern: on one axis
a migration system developed among the countries of Western, Central and
Eastern Europe and on the other a system of movement arose among the
CIS countries (World-Bank (2006)). For example, Russia receives 75% of its
immigrants from other CIS countries and over 70% of migrants from Western
ECA (Europe and Central Asia regions) go to Western Europe (World-Bank
(2006)). Finally, North Africa is characterized by a predominant labor mi-gration
toward Europe.
Following these facts, we distinguish 4 types of regions in the model:
• pure immigration zones only face to inward ows: Western Europe;
• pure emigration zones only face to outward ows: MediterraneanWorld,
South Asian World;
• intermediate zones face simultaneously in- and outows: Eastern Eu-rope,
Slavic World;
• no migration zones are isolated from international mobility of work-ers
(there is thus neither immigration nor emigration): North America,
Latin America, Eastern Asian World, Africa. This assumption is neces-sary
given by the fact that we focus on neighborhood regions' migration
ows.
We then adopt a calibration process that allows to make actual net migra-tion
ows compatible with our multi-regions description of the world using
dierent data sources. First, we aggregate net migration ows by countries
used in the medium variant of 2004 UN population projections (United-
Nations (2004)) to correspond to the INGENUE2 regional grouping. Then,
we calibrate immigration ows to Western Europe, Eastern Europe and the
Slavic world on UN gures removing intra-regional ows (for example Ger-man
migrations to France) as well as non-pertinent ows (for instance West-ern
Europe migrations to North America). Given the world aspect of our
model, immigration in host regions has to correspond to emigration in send-ing
regions. Thus, we have to allocate immigration ows to Western Europe,
Eastern Europe and the Slavic world by origin regions. For that purpose,
we rst use the emigration stocks and rates of 195 origin countries built by
Docquier Marfouk (2005) to allocate the immigration ows to Western
Europe between our pure emigration zones.
However, Docquier Marfouk (2005)'s database only focus on OECD coun-tries
as receiving countries and there is no information on migration ows to
21
29. Eastern Europe and the Slavic world. Thus, for Eastern Europe, the Slavic
World and the CIS countries, we complete with the recent World Bank re-port
on Eastern Europe and the former Soviet Union (World-Bank (2006))
as well as with the recent data of Salt (2005). Table 1 gives the calibrated
net migration ows by regions in 2005 and Figure 1 gives the direction of
migration ows by region as well as countries concerned by migration. Note
that the calibrated ows appear lower than the UN ocial net ows given
that we only focus on Western Europe and neighbourhood regions.
Table 1: Yearly net migration ows by origin and destination countries in
2005 (in thousand)
Destination Countries
Western Europe Eastern Europe Slavic World Total Emigration
Mediterranean World 124.6 0.8 53.2 178.6
- North Africa 112.9 0.5 0.0 113.3
- CIS Middle East Countries 11.7 0.4 53.2 65.3
South Asian World 9.8 0.2 54.6 64.7
Eastern Europe 74.6 0.0 0.0 74.6
Slavic World 47.1 23.7 18.2 89.0
- Russian Federation 29.6 5.0 0.0 34.6
- Ukraine 17.5 18.7 18.2 54.4
Total Immigration 256.1 24.7 126.0 406.9
Origin Countries
Sources : Docquier and Marfouk (2005), Salt (2005), United-Nations (2004), World Bank (2006); Authors' calculations
Estimation of future migration ows
We have to reproduce this methodology for each ve year period in the
future. Some migration streams are durable lasting decades and relatively
predictable. Conversely, assessing migration potential in CIS countries is a
very complex task requiring a careful consideration of factors, apart from
economic and demographic ones. Indeed, recent study of World-Bank (2006)
suggest that the nature of labor migration in the CIS countries has changed
since the beginning of the reforms. Namely, emigration from these countries
was caused primarily by political and ethnic motives, initially. In recent
years, economic reasons are becoming increasingly important and workers
move mainly for higher incomes, better job opportunities and quality of life.
Moreover, migration ows that are generated in the recent period may be
unsustainable in a decade owing to the medium-term population dynamics
in most of the CIS countries. Consequently, future migrations ows from
CIS countries can not be evaluated by simply extending recent ows. The
main driving forces of the past and recent trends in the migration ows in
CIS thus have to be fully analyzed.
For these reasons, we use the estimations performed by Uzagalieva (2007)
22
30. concerning the possible scenarios of future migration ows in CIS countries
until 2025. Uzagalieva (2007) evaluates the potential migration ows from
CIS to Western Europe and Russia based on economic and demographic
factors but also on other factors of migrants' life such as ethnic background,
political situation and migration policies in CIS countries. The assessment of
the immigration potential to Russia and Western Europe from CIS countries
also requires a number of assumptions to be made in order to reect future dif-ferences
in economic and political climate, policies and reform progress. More
specically, among the dierent scenarios suggested by Uzagalieva (2007), we
adopt the status-quo scenario in terms of catching-up which is close to our
assumptions on TFP.
In concrete terms, the scenarios of future migration ows in CIS countries
are determined for 3 population groups separately:
1. The rst group includes emigration for ethnic reasons (nationalities
which have ethnic ties with other countries) that will most likely em-igrate
irrespective of socio-economic and political situation in CIS, if
they are attracted by foreign countries. The potential emigration is
obtained at about one million for the period 2006 to 2025.
2. The second group includes new ethnic minorities which appeared after
the establishment of independent CIS states. Their migration potential
to Russia will depend more on socio-economic and political situation in
CIS, as well as the Russian politics. Using a standard gravity model,
the estimated migration potential is 6.7 millions for the period 2006
to 2025. Under the higher degree of economic uncertainty in CIS,
which is measured in terms of the standard deviation of GDP growth
rates across its members, the estimated potential of migration to Rus-sia
would be larger (13.18 millions), while policy restrictions towards
immigration in Russia would reduce the estimated potential to 3.23
millions.
3. The third group concerns emigration potential from CIS to Western
Europe. The assessment of this potential emigration ows is based on
the estimation results reported in Fertig (2001), with the underlying in-tuition
that long-run migration perspectives will be driven by economic
factors. The potential emigration from CIS to Germany and Western
Europe for economic reasons is equal to 1.26 million and 2.18 millions,
respectively, for the period from 2006 to 2025.
Migration ows from CIS countries are thus carefully estimated on economic,
demographic and political factors that distinguish our work from traditional
23
31. projections relying more on informed judgements than on systematic model-ing.
Net migration from other regions (North Africa and Eastern Europe) after
2005 are relatively steady and predictable. Thus, we simply calibrate our
migration ows to match the UN time prole until 2025. Given the long run
feature of INGENUE 2, we need to make some assumptions on migration
ows far in the future. Between 2030 and 2100, we keep emigration rates
constant at their 2025 values so that migrations ows only evolve with the
number of young workers in emigration area. After 2100, migration ows pro-gressively
reduce and are nil in 2150 in order for the population to converge
towards a stationary level. Table 2 gives the dynamics of net migration ows
until 2050. We have to underline here that migration ows extrapolations
beyond 15 years are not reasonable. Thus, long run value should be seen as
a possible extension to provide some hints rather than real prediction.
Table 2: Net migration ows by regions until 2050 (in thousand)
2000-2005 2006-2010 2011-2015 2016-2020 2026-2030 2046-2050
Western Europe 0 256.1 235.1 226.0 204.9 199.9
Mediterranean World 0 -178.6 -147.6 -153.6 -159.3 -175.8
- North Africa 0 -113.3 -101.8 -101.8 -97.3 -102.0
- CIS Middle East Countries 0 -65.3 -45.8 -51.8 -62.1 -73.8
South Asian World 0 -64.7 -50.8 -50.3 -51.6 -54.8
Eastern Europe 0 -49.9 -45.4 -45.4 -42.5 -36.8
- Inflows 0 24.7 24.7 24.7 20.8 18.0
- Outflows 0 -74.6 -70.1 -70.1 -63.3 -54.8
Slavic World 0 37.0 8.7 23.3 48.6 67.6
- Inflows 0 107.8 70.7 80.2 93.4 106.0
- Outflows 0 -70.8 -62.1 -56.9 -44.8 -38.4
Sources : Docquier and Marfouk (2005), Salt (2005), United-Nations (2004), World Bank (2006), Uzagalieva (2007); Authors' calculations
5.2 Results of the migration scenario
The results of our comprehensive migration scenario are compared to the
benchmark with no migration. The eects of the shock on the main demo-graphic
and macroeconomic variables are presented in Figure 6 (expressed in
percentage point deviation from the benchmark).
24
32. Figure 6: Results of the UN migration scenario (dierence from baseline scenario): 2000-2050
(a) Total population
8%
6%
4%
2%
0%
-2%
-4%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(b) Dependency ratio
4%
2%
0%
-2%
-4%
-6%
-8%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(c) Net Saving in % of GNP
0.80
0.60
0.40
0.20
0.00
-0.20
-0.40
-0.60
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(d) Regional annual real interest rate
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
-0.02
-0.04
-0.06
-0.08
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
25
33. Figure 6: Results of the UN migration scenario (dierence from baseline scenario): 2000-2050
(e) Current Account Balance - percentage of World
GDP)
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0.00
-0.01
-0.02
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(f) Ownership Ratio
1.5%
1.0%
0.5%
0.0%
-0.5%
-1.0%
-1.5%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(g) GDP Growth rate
0.25
0.20
0.15
0.10
0.05
0.00
-0.05
-0.10
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
(h) Private consumption per capita (level)
0.8%
0.6%
0.4%
0.2%
0.0%
-0.2%
-0.4%
-0.6%
2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
N. America W. Europe Japan S. America Mediterranean
Africa Slavic Word East Asia South Asia E. Europe
26
34. The introduction of migratory ows from neighbourhood countries in our
demographic model strongly modies the international distribution and the
age structure of the world population for the concerned regions. Western
Europe is the only zone that faces large immigration ows (the Slavic world
also exhibits the features of an immigration zone on the whole period but to
a lower extent) while Eastern Europe, South Asian and Mediterranean zones
are emigrations zones (Figure 6(a)). Thus, Western Europe and the Slavic
world have a total population respectively 6.5% and 2.7% higher than in the
baseline case in 2050. At the same time, the population of Eastern Europe
and Mediterranean world is respectively 3.4% and 2.6% lower. The South
Asian world is barely aected by migration from Kazakhstan and Tajikistan
given that these two countries only represent around 1% of the South Asian
world total population in 2005.
International migrations also modify the age structure of the world popula-tion
since migrants are assumed to be young workers (aged 20-24). In 2050,
the dependency ratio is almost 6.7 points lower than in the baseline case in
Western Europe (Figure 6(b)) and 3.4 point lower in Slavic world. At this
horizon, it increases by about 3.9 points in Eastern Europe and by almost 2
points in Mediterranean World13. It follows that the nancing of the PAYG
pension system is substantially improved (resp. deteriorated) in Western
Europe and in Slavic world (resp. in sending regions) in line with the de-pendency
ratio evolution. For example, the contribution rate reaches 30.4%
in Western Europe in 2050 (compared to 32% in the baseline case) because
migrants contribute to its nancing. Therefore, the net rate of immigration
necessary to oset the eect of ageing in the long run are very high.
The impact of migratory ows from neighbourhood regions on the GDP
growth rate is far from being insignicant. The arrival of young workers
progressively increases the GDP growth rate in Western Europe. It is more
than 0.2 point higher in 2035 and then stabilizes to this gap with the ageing of
rst migrant cohorts (see Figure 6(g)). The eect on the Slavic world GDP
growth rate follows the working age population evolution and is thus less
marked. The mirror eect of the improving economic situation in Western
Europe and in Slavic world is a deterioration in the regions of emigration,
and noticeably in Eastern Europe. Indeed, the magnitude of the deterioration
13Note that the emigration rates in Eastern Europe and in the Mediterranean world
are relatively similar. The signicant dierence on the dependency ratio evolution is
explained by the dierent demographic features between these two regions. The former
is much advanced in the ageing process whereas the latter are still characterized by a
more sustained growth of its working age population. The consequences of young workers
emigration are thus more pronounced in the Eastern Europe case.
27
35. depends on the loss of potential workers relative to the total labor force in the
regions. As previously explained, Eastern Europe suers the most adverse
consequences of emigration as it is a region much advanced in the ageing
process and is already suering from a declining population.
Nevertheless, the level of consumption per capita is less than in the baseline
scenario in Western Europe until the very end of the half-century (see Figure
6(h)). The reason lies in the production sector : the inow of workers reduces
capital intensity relative to baseline. Indeed, immigration can be seen as a
supply shock on the labor market, thus impacting on the productivity of
factors supplied by natives. For a given stock of capital, an increase in labor
supply reduces the capital by worker. The marginal productivity of capital
is raised and the interest rate as well. Conversely, labor productivity is
diminished with a lower capital intensity.
The real wage rate, being a decreasing function of the return on capital on
the factor price frontier, is itself on a slower path than in baseline. It follows
that relatively to the baseline scenario consumption is less augmented than
total population ; hence consumption per capita is lower. Around 2035,
when savings gain momentum (see Figure 6(c)) the interest rate recedes
a bit because savings grow faster than investment. Therefore the growth of
consumption per capita relative to baseline turns positive from 2020 onwards
and the level overtakes the baseline one in 2040. In the Slavic world, the level
of consumption per capita is always lower than in the baseline given the net
savings prole.
The opposite occurs in emigration regions. But the impact is diused over
several regions and mitigated by the size of the labor force. The fall in
the interest rate and the subsequent increase in productivity persists for
almost the entire span of the fty year period. Only Eastern Europe and the
Mediterranean exhibit a non-negligible increase in consumption per capita.
The sharp increase of saving in Western Europe (compared to the baseline
trajectory) from 2030 is mainly explained by the facts that the rst cohorts
of migrants are now entering the high saver cohorts (aged between 45
and 69). The opposite occurs mainly in Eastern Europe where saving is
decreasing substantially from 2030, as a new illustration of the fact that
this region suers the most adverse consequences of emigration as it is much
advanced in the ageing process (see Figure 6(c)).
Because of the rise in interest rate, the saving investment balance in Western
Europe stays more in surplus than in the baseline scenario. The current
account balance, which was already in surplus in baseline, is therefore more
so. The real exchange rate is depreciated relative to baseline since the real
28
36. interest rate is higher. Yet it still appreciates slightly during the half-century.
It follows from the improvement of the current account balance that Western
Europe reinforces its creditor position in the world economy. The ownership
ratio rises systematically above baseline (see Figure 6(f)). The regions of
emigration with slightly appreciating exchange rates relative to baseline stay
more in decit and more in debt.
6 Conclusion
In this paper we assess the demographic and economic consequences of migra-tion
in Europe and the neighbourhood countries, using a general equilibrium
overlapping generations model. With such a tool, we are able to quantify
precisely the demographic consequences of the migrations between neigh-bourhood
regions and Western Europe. The general equilibrium OLG model
gives some interesting insights into the macroeconomic adjustments of such
migration scenarios in the long run. In particular, we show that the nanc-ing
of the PAYG pension system is substantially improved in the regions
receiving the migrants (Western Europe and the Slavic world in the migra-tion
scenario presented here). Nevertheless, one must note that this realistic
migration scenario does not oset the eect of ageing in the regions receiv-ing
the migrants: in this regard, pension reforms appears to be necessary in
order to deal with the ageing problem that these regions will face in a near
future. Concerning the regions losing migrants, the adverse consequences of
emigration are more important the more the region is advanced in the ageing
process (and is already suering from a declining population). In this re-gards,
our analysis provides some quantitative results than allow to compare
the consequences of emigration for Eastern Europe and the Mediterranean
World, two regions that are not at the same stage in the ageing process.
We have to underline that our results are sensitive to some assumptions of the
model. On the one hand, immigrants are assumed to have exactly the same
productivity as the native workers. The skill distribution of immigrants from
neighbourhood regions suggests that they may be less skilled than the aver-age
European worker. On the other hand, the INGENUE 2 model assumes
perfect exibility in the labor and goods markets. Thus, immigration has no
impact on unemployment and economic output is continuously at potential.
Furthermore, the general equilibrium multi-regions OLG model that we use
have several assumptions that could limit the scope of our analysis. Firstly,
the remittances ows (associated with the migrations ows) are not modeled
29
37. in our framework. Clearly, these ows could be of great importance, from a
quantitative point of view, noticeably when we focus on some specic coun-tries
(in particular in countries of limited size where the emigration rates
are high such as Moldova, Albania, Tajikistan or Armenia with remittances
higher than 10% of GDP). Secondly, the age of migrants is limited to some
specic cohort and we do not model return migration. Such demographic
assumptions would be quite dicult to include in our multi-regions OLG
framework. Despite the shortcomings that we mention, it appears that the
main value-added of our analysis is the long term general equilibrium analy-sis
that we propose. Indeed, to the best of our knowledge, it's the rst time
that migration consequences are treated in a such an applied global model
that simultaneously deals with destination ad origin regions issues.
30
38. References
Aglietta, M., Chateau, J., Fayolle, J., Juillard, M., Cacheux, J. L., Garrec,
G. L. Touzé, V. (2007), 'Pension reforms in europe: An investigation
with a computable olg world model', Economic Modelling 24, 481505.
Alho, J. Borgy, V. (2007), 'Global ageing and macroeconomic consequences
of demographic uncertainty in a multi-regional model', Cepii Working
Paper 2007-09.
Armington, P. (1969), 'A theory of demand for products distinguished by
place of production', IMF Sta Papers (16), 15978.
Auerbach, A. Kotliko, L. (1987), Dynamic Fiscal Policy, London : Cam-bridge
University Press.
Backus, D., Kehoe, P. Kydland, F. (1995), 'International Business Cycles
: Theory and Evidence', in Cooley editors, Frontiers of Business Cycles
: Princeton : Princeton University Press pp. p. 331356.
Barrell, R., FitzGerald, J. Riley, R. (2007), 'Eu enlargement and migration:
Assessing the macroeconomic impacts', NIESR Discussion Paper n292
.
Brooks, D. (2003), 'Population ageing and global capital ows in parallel
universe', IMF Sta Paper 50, p. 200221.
Börsch-Supan, A., Ludwig, A. Winter, A. (2006), 'Aging, pension reform
and capital ows', Economica 73, 625658.
Carrera, S. (2007), 'Building a common policy on labour immigration: To-wards
a comprehensive and global approach in the eu?', CEPS Working
Documents n256 .
Chojnicki, X., Docquier, F. Ragot, L. (2005), 'L'immigration choisie
face aux dés économiques du vieillissement démographique', Revue
Economique 56, 13591384.
Coale, A. Demeny, P. (1966), Regional Model Life Tables and Stable Pop-ulations,
Princeton : Princeton University Press.
Docquier, F. Marfouk, A. (2005), International Migration by Educational
Attainment (1990-2000) - Release 1.1, Palgrave, chapter 5.
31
39. EuropeanCommission (2006), 'The global approach to migration one year on:
Towards a comprehensive european migration policy', Communication
COM 735 nal .
Fehr, H., Jokisch, S. Kotliko, L. (2003), 'The developed world's demo-graphic
transition. the roles of capital ows, immigration and policy',
NBER Working Paper 10096.
Fehr, H., Jokisch, S. Kotliko, L. (2004), 'The role of immigration in deal-ing
with the developed world's demographic transition', NBER Working
Paper 10512.
Fertig, M. (2001), 'The economic impact of eu-enlargement: Assessing the
migration potential', Empirical Economics 26.
Heston, A., Summers, R. Aten, B. (2002), Penn World Table Version 6.1,
Center for International Comparisons at the University of Pennsylvania
(CICUP).
Iakova, D. (2007), 'The macroeconomic eects of migration from the new
european union member states to the united kingdom', IMF Working
Paper n61 .
IMF (2004), 'How will demographic change aect the global economy?',
World Economic Outlook .
Ingenue (2002a), 'A Long Term Model for the World Economy', in
J.O.Hairault and H.Kempf, editors, Market Imperfections and Macroe-conomic
Dynamics Boston/London : Kluwer Academic Publishers pp. p.
5173.
Ingenue (2006), 'The larger europe: Technological convergence and the
labour migration', Revue Economique 57(4), 823850.
Ingenue (2007a), 'Ingenue 2: A long term intertemporal world model for the
21st century', Mimeo .
Ingenue (2007b), 'Asian catch up, world growth and international capital
ows in the xxist century: A prospective analysis with the ingenue 2
model', Cepii Working Paper 2007-01.
Krueger, D. Ludwig, A. (2007), 'On the consequences of demographic
change for the rates of returns to capital and the distribution of wealth
and welfare', Journal of Monetary Economics 54, 4987.
32
40. Miles, D. (1999), 'Modeling the impact of demographic change upon the
economy', Economic Journal 109, p. 136.
Modigliani, F. (1986), 'Life cycle, individual thrift, and the wealth of nations,
nobel lecture', American Economic Review .
Obstfeld, M. Rogo, K. (1996), Foundations of International Macroeco-nomics,
MIT press editor.
Salt, J. (2005), 'Current trend in international migrations in europe', Council
of Europe .
Storesletten, K. (2000), 'Sustaining scal policy through immigration', Jour-nal
of Political Economy 108(2), 300323.
United-Nations (2001), World Population Prospects. The 2000 Revision: vol-ume
I: Comprehensive Tables, New York: United Nations.
United-Nations (2004), 'World population prospects: The 2004 revision',
Department of Economic and Social Aairs, Population Division .
Uzagalieva, A. (2007), 'Labor migration in cis in the context of european
integration and changing borders', Enepo report: WP7 .
World-Bank (2006), Migration and Remittances: Eastern Europe and the
Former Union, The World Bank.
Yaari, M. (1965), 'Uncertain lifetime, life insurance and the theory of the
consumer', Review of Econcomic Studies 32, p. 137150.
33
41. Appendix 1: Regional grouping
The World is divided in 10 regions according mainly to geographical criteria
in the following way. Countries or regions concerned by migration ows are
underlined.
1. Western Europe : 'Channel Islands', 'Denmark', 'Finland', 'Ice-land',
'Ireland', 'Norway', 'Sweden', 'United Kingdom', 'Greece', 'Italy',
'Malta', 'Portugal', 'Spain', 'Austria', 'Belgium', 'France', 'Germany'
(East + West), 'Luxembourg', 'Netherlands', 'Switzerland'.
2. Eastern Europe : 'Estonia', 'Latvia', Lithuania', 'Bulgaria', 'Czech
Republic', 'Hungary', 'Poland' 'Romania', 'Slovakia', 'Slovenia', 'Alba-nia',
'Bosnia and Herzegovina', 'Croatia', 'Former Yugoslav Republic
of Macedonia'.
3. North America : 'Canada', 'United States of America', 'Aus-tralia',
'New Zealand', 'Melanesia', 'Fiji', 'New Caledonia', 'Papua New
Guinea', Solomon Islands', 'Vanuatu', 'Micronesia', 'Guam', 'Polyne-sia',
'French Polynesia', 'Samoa'.
4. Latin America : 'Argentina', 'Bolivia', 'Brazil', 'Chile', 'Colom-bia',
'Ecuador', 'French Guiana', 'Guyana', 'Paraguay', 'Peru', 'Suri-name',
'Uruguay', 'Venezuela', 'Belize', 'Costa Rica', 'El Salvador',
'Guatemala', 'Honduras', 'Mexico', 'Nicaragua', 'Panama', 'Bahamas',
'Barbados', 'Cuba', 'Dominican Republic', 'Guadeloupe', 'Haiti', 'Ja-maica',
'Martinique', 'Netherlands Antilles', 'Puerto Rico', 'Saint Lu-cia',
'Trinidad and Tobago'.
5. Japan
6. Mediterranean World : 'Algeria', 'Egypt', 'Libyan Arab Jamahi-riya',
'Morocco', 'Tunisia', 'Western Sahara', 'Armenia', 'Azerbaijan',
'Bahrain', 'Cyprus', 'Georgia', 'Iraq', 'Iran', 'Israel', 'Jordan', 'Kyrgyzs-tan',
'Kuwait', 'Lebanon', 'Occupied Palestinian Territory', 'Oman',
'Qatar', 'Saudi Arabia', 'Syrian Arab Republic', 'Turkey', 'Turkmenis-tan',
'United Arab Emirates', 'Uzbekistan', 'Yemen'.
7. Eastern Asian World : 'China', 'Democratic People's Republic
of Korea', 'Mongolia', 'Republic of Korea', 'Brunei Darussalam', 'Cam-bodia',
'East Timor', 'Lao People's Democratic Republic', 'Myanmar',
'Philippines', 'Singapore', 'Thailand', 'Viet Nam'.
34
43. Appendix 2: Description of the model
In this appendix, we provide a technical presentation of the economic part
of the INGENUE 2 model. A complete presentation of the model could be
found in Ingenue (2007a).
Households
Economic choices of households concern consumption/saving and are made
with perfect foresight at the beginning of their adult life. Labor supply is
assumed to be exogenously given by the age-specic rate of participation to
the labor market, noted : ez
a. We take International Labor Organization
(ILO) data and projections to characterize activity from 1950 until 2015 and
we assume that after this date participation rates remain xed at their 2015
level. Adults can (partially) retire from age rz and they may not stay in the
labor force after a legal maximal mandatory retirement age ¯rz.
The intertemporal preferences of a new entrant in working life, native or
migrant, are given by the following life-time utility function over uncertain
streams of consumption cz
a and leaving a voluntary bequest Hz to their chil-dren
when they reach the age of T (if they survive until this age)14 :
Uz
a0(t) =
X20
a=a0
a−a0
aY−1
i=a0
szi
#
(t + i)
− 1
cz
a(t + a − a0)
−1
+ T−a0
YT
i=a0
sz
T (t + T − a0)V (Hz(t + T − a0)) (2)
where is the psychological discount factor, Ca is consumption at age a ;
is the intertemporal substitution rate and V (·) is the instantaneous utility
of bequest : each agent has some felicity from leaving a bequest but it is
independent of the future stream of the consumption that his children draw
from this bequest (warm glow altruism).
At any given period, the budget constraint is :
14Usually in these kind of model the age T is the biological limit to life (here 105 years.)
but in order to imply a realistic pattern of inheritance among the children of deceased
households, we assume that T is equal to 80 years old.
36
44. z
a (t)pz
f (t)Cz
a(t) + pz
f (t)Sz
a(t) = Y z
a (t) + pz
f (t)Sz
a−1(t − 1)
Rz(t)
sa−1(t − 1)
+ pz
f (t)hz
a(t) − pz
f (t)Hz(t)T (t) (3)
Y z
a (t) =
8
:
z
a (t) + (1 − z(t))wz(t)ea(t)#a for a ra
(1 − z(t))wz(t)ea(t)#a + (1 − ea(t))Pz
a (t) for ra a ¯ra
Pz
a (t) for a ¯ra
where Sz
a denotes the stock of assets held by the individual at the end of
age a and time t, Rz(t) · Sa(−1) is nancial income (domestic real returns
on assets holdings times wealth). We assume Sa0−1 = 0 and S20 0 for all
a 2 [a0, . . . , 20]. a is the age-specic equivalence scale that takes into account
costs of child-rearing (see details hereafter), and Ya is the non assets-based
net disposal income. z
a (t)pz
f (t)Cz
a(t) denotes the total consumption (that is
f (t)Sz
the consumption of the parents and the one of their children). pz
a(t)
represents the wealth at the end of date t. pz
f (t) denotes the price of the
domestic nal good (in terms of one foreign goods) so Rz(t) is one plus the
return to capital income expressed in units of this nal good. Due to life
uncertainty at the individual level, we assume following Yaari (1965) that
there exists perfect annuities markets that pool death risk within the same
generation so that the return to capital is corrected by the instantaneous
survival probability of the generation. Besides children receive inherited as-sets
hz
a(t−1) from the voluntary bequests of their parents. People will leave
bequest Hz(t) to their heirs only at the age of T, so in Equation (3) T (t)
is a dummy that will be equal to 1 if a = T and zero in any other case.
For full-time active years (a 2 [a0, ra[), Ya is simply equal to the net labor
income after social security taxes (at rate ), where w is the real wage rate per
ecient unit of labor at time t. When the agent is partly retired (a 2 [ra, ¯ra[),
she also receives a pension benet Pz
a for the unworked hours. And when she
is full-time retired (a 2 [¯ra, 20]) she only receives the pension benet. Unless
special mention, pension benets are assumed to be age independent.
The z
a term is the age-specic equivalence scale. It takes into account the
direct and indirect private costs of child-rearing. In order to calculate this
relative cost of child-rearing for each cohort, we use the age distribution of
children for each parent (from their past fertility behavior) and a constant
age equivalence scale of children.15. z
a (t) is the labor income that children
15Trying to get a more detailed structure would entail keeping the distribution of children
37
45. bring to their parents resources during their childhood (calculated in the
same spirit as costs of children-rearing).
An agent's earning ability is assumed to be an exogenous function of his
age. These skill dierences by age are captured by the eciency parameter
#a which changes with age in a hump-shape way to reect the evolution of
human capital. For simplicity, we assume that this age-eciency prole is
time-invariant and is the same in all regions. We adopt Miles (1999) human
capital prole's estimation and #a is normalized so that #a0 = 1.
Voluntary bequests are distributed to children according to the fertility cal-endar
of their deceased parents. At the equilibrium the sum of voluntary
bequest will be equal to the inheritance received by children. We assume
that bequests are distributed equally to all children, i.e. proportional to the
proportion of the children born from cohort of age T (according to her past
fertility calendar).
In our international context, households can choose the region they want
to invest their wealth. The tradeo between domestic and foreign assets is
characterized by :
Rz(t) = R?(t)
pz
f (t − 1)
pz
f (t)
for all t 0 (4)
where R?(t) is the unique world interest factor (in terms of the world numéraire),
the condition (4) means that if a region z'household saves one unit in his do-mestic
asset (capital) it will yield Rz(t) in real terms the next period, if he
chooses to invest in foreign assets he will receive in real terms R?(t)
pz
f (t−1)
pz
f (t) .
The arbitrage condition then leads to return equalization.
The public sector
The pension Pz
a (t) paid is a fraction (t) of the current average (net of tax)
wage [1 − z(t)]wz(t). We assume a time-to-time balanced-budget rule :
z(t)
1 − z(t)
= (t) ·
P
ara(1 − ea(t))La(t)
P
a¯ra ea(t)La(t)
(5)
In the baseline case, the regional age ra of minimum legal retirement age as
with respects to their grand-parents and would complicate in an useless way the number
of state variables in the system.
38
46. well as the maximum age ¯ra and the ratio (t) are xed (at least after year
2000). Payroll tax rates (t) are thus endogenously determined by (5).
Production side
Intermediate good sector
Each zone z specializes in the production Y Iz of a single intermediate good.
Production in period t takes place with a constant return to scale Cobb-
Douglas production function using capital stock Kz(t − 1) installed at the
beginning of the period t in the country z and the full domestic labor force
Nz(t), 8z :
Y Iz(t) = AIz(t) (Kz(t − 1)) (Nz(t))1− 0 1 (6)
The maximization of the rm value will imply that at the equilibrium (8t) :
R?(t + 1)
pz
f (t)
pz
f (t + 1)
+ z(t + 1) − 1 =
pzI
(t + 1)
pz
f (t + 1)
AIz(t + 1) (kz(t))−1(7)
wz(t) = pzI
(t)(1 − )AIz(t) (kz(t − 1)) (8)
where pzI
is the price of the domestic intermediate good, z(t) is the rate of
economic depreciation and kz(t − 1) = Kz(t − 1)/Nz(t) is the capital-labor
ratio.
Final good production sector
The domestic composite nal good of region z, Y Fz, is produced according
to a combination of two intermediate goods: a domestic intermediate good
in quantities Bz and a World intermediate good in quantities Mz, accord-ing
to the following CES technology, where 0 denotes the elasticity of
substitution, 8z :
Y Fz(t) = AFz(t)
h
(!z)
1
z (Bz(t))
z−1
z + (1 − !z)
1
z (Mz(t))
z−1
z
i z
z−1
(9)
with !z 2 [0, 1]. This CES combination of external and internal good to
produce domestic nal good is a reminiscence of Armington (1969) aggre-gator,
AFz(t) being total factor productivity. Taking prices as given, the
39
47. competitive behavior producer determines Bz and Mz that minimizes cur-rent
prot: pz
f (t)Y Fz(t)−pzI
(t)Bz(t)−p?(t) ·Mz(t) subject to (9), where pzI
is the price of the home-specic intermediate good and p? is the price of the
world intermediate good.
The world producer of an homogenous world intermediate good
In order to simplify the exchanges of intermediate goods between regions of
the world, we assume that there exists a ctive world producer that uses all
region-specic intermediate goods in quantities X?,z in order to produce a
specic world intermediate good Y ? according to the following CES function :
Y ?(t) = A?(t)
X
z
z(t)
1
μXz(t)
μ−1
μ
# μ
μ−1
(10)
This ctive producer is assumed to act competitively, taking prices as given.
Hence, he chooses P
{Xz(t)}z, at each period, to maximize its static prot :
p?(t)Y ?(t) −
z pzI
(t) ·Xz(t), subject to (10). This yields at the equilibrium
the following factor demand function :
Xz(t) =
z(t) (Ez(t))−μ Y ?(t)A?(t)μ−1 for all z (11)
where for convenience Ez(t) = pzI
(t)
p?(t) is dened as the terms of trade. It can
be shown that at the equilibrium p? equals to :
p? =
P
[
z
zpzI
(t)1−μ]
1
1−μ
A?(t)
A trick to model real imperfections on world nancial market
For a world macroeconomic model to be realistic, the world asset capital
market has to be imperfect. Because sources of imperfection and asymmetries
in nancial markets are various and uneasy to model with rigorous micro-foundations
in such a large scale model as Ingenue, we adopt the following
ad hoc formulation for z the region-specic rate of economic depreciation,
with 0 :
z(t) = ¯z + (1 − ¯z)z · Max
1 −
Sz(t − 1)
Kz(t − 1)
; 0
for all z (12)
40
48. where Sz(t) =
P19
a=a0
La(t)Sa(t) is the aggregate nancial wealth across all
cohorts in region z which is equal to the sum of the region capital stock and
the net assets on the rest of the world. This equation then indicates that
capital invested in a region z depreciates more rapidly than the average when
the region is a net debtor to the rest of the world.
41