a1 IRES, Université Catholique de Louvain
a2 FNRS, Belgian National Fund of Scientific Research, Belgium
a3 IRES, Université Catholique de Louvain
a4 CREA, University of Luxembourg
We analyze the consequences of increasing MENA-to-EU migration on both sending and receiving regions. Using a general equilibrium model, we find that increasing MENA-to-EU migration generates significant changes in EU15 tax rates and income per capita. Compared to a non-selective immigration shock, selecting immigrants leads to a moderate reduction in tax rates, but to a greater impact on income per capita in the EU15. Emigration, especially if high-skilled, has a detrimental impact on MENA tax rates. Finally, the negative effects in MENA are mitigated if the brain drain leads to side-effects or is accompanied by increased education attainment at origin.
(Online publication June 22 2011)
* This paper was prepared by Frédéric Docquier and Luca Marchiori, as part of the EC-Funded World Bank Program of International Migration from Middle East and North Africa and Poverty Reduction Strategies, a program of migration-related research and activities to identify and support the implementation of projects, policies, regional arrangements, and institutional reforms that will maximize the benefits of international migration flows and reduce their costs. We thank Jennifer Keller and Sara Johansson de Silva for helpful comments. The findings, conclusions and views expressed are entirely those of the authors and should not be attributed to the World Bank, its executive directors or the countries they represent.