The long-term economic impact of reducing migration in the UK
| Autor: | Katerina Lisenkova, Marcel Mérette, Miguel Sanchez-Martinez |
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| Předmět: |
Macroeconomics
Population ageing 050208 finance 05 social sciences Net migration rate Term (time) Projections of population growth Income tax 0502 economics and business Economics Demographic economics Economic impact analysis 050207 economics Baseline (configuration management) General Economics Econometrics and Finance Government budget |
| Zdroj: | University of Strathclyde |
| Popis: | This paper uses an OLG-CGE model for the UK to illustrate the long-term effect of migration on the economy. We use the current Conservative Party migration target to reduce net migration “from hundreds of thousands to tens of thousands” as an illustration. Achieving this target would require reducing recent net migration numbers by a factor of about 2. We undertake a simulation exercise to compare a baseline scenario, which incorporates the principal 2010-based ONS population projections, with a lower migration scenario, which assumes that net migration is reduced by around 50 per cent. The results show that such a significant reduction in net migration has strong negative effects on the economy. By 2060 the levels of both GDP and GDP per person fall by 11.0 per cent and 2.7 per cent respectively. Moreover, this policy has a significant impact on public finances. To keep the government budget balanced, the effective labour income tax rate has to be increased by 2.2 percentage points in the lower migration scenario. |
| Databáze: | OpenAIRE |
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