Migration in Europe

In order to assess the economic impact of immigration, we have used our macro model, NiGEM to simulate an increase in Polish emigration amounting to about 4 per cent of the population of that country towards Germany and the UK. We have demonstrated that both host countries adjust to immigration flows in a similar way, although Germany reacts somewhat more slowly than the UK. Both economies settle to new equilibria with higher output and no permanent change to the unemployment rate. In both countries output rises marginally less than employment because some infrastructure capital is assumed to not rise in line with population.

The economic impact of emigration for Poland is a mirror image of the UK and Germany. Emigration in Poland has a depressing permanent impact on the average level of output which settles to 3.5 points lower than its initial level. As the stock of infrastructure is not assumed to fall in line with the population the remaining population enjoy a higher level of output per head than they would have done if there had been no outward migration.