Welcome to the UPF Digital Repository

Should I stay or should I go? Austerity, unemployment and migration

Show simple item record

dc.contributor.author Bandeira, Guilherme
dc.contributor.author Caballé, Jordi
dc.contributor.author Vella, Eugenia
dc.date.accessioned 2018-04-25T09:28:43Z
dc.date.available 2018-04-25T09:28:43Z
dc.date.issued 2018-02
dc.identifier.uri http://hdl.handle.net/10230/34454
dc.description.abstract High unemployment and fiscal austerity during the recent crisis have led to significant migration outflows from the periphery of the euro area. This paper introduces endogenous migration both for the unemployed and employed members of the household in a small open economy DSGE model with search and matching frictions. The government can use public spending, unemployment benefits, or labor income taxes as fiscal consolidation instruments. A tax-based consolidation induces the highest migration outflows in the short run, which exacerbates the induced GDP contraction. Cuts in unemployment benefits induce the highest outflows of jobseekers in the medium run, but with more favorable effects on GDP and unemployment as the domestic wage adjusts downwards. The latter also leads to a very persistent increase in the intensity with which current workers look for a job abroad. Government spending cuts, on the other hand, have a small impact on migration. A repatriation policy, modelled as a higher utility cost of migration, generates a return of migrants, leading to a boost in aggregate demand, a fall in real wages and an increase in unemployment.
dc.description.sponsorship The ADEMU Working Paper Series is being supported by the European Commission Horizon 2020 European Union funding for Research & Innovation, grant agreement No 649396.
dc.format.mimetype application/pdf
dc.language.iso eng
dc.relation.ispartofseries ADEMU Working Paper Series;83
dc.rights This is an Open Access article distributed under the terms of the Creative Commons Attribution License Creative Commons Attribution 4.0 International, which permits unrestricted use, distribution and reproduction in any medium provided that the original work is properlyattributed.
dc.rights.uri https://creativecommons.org/licenses/by/4.0/
dc.title Should I stay or should I go? Austerity, unemployment and migration
dc.type info:eu-repo/semantics/workingPaper
dc.subject.keyword DSGE model
dc.subject.keyword Fiscal consolidation
dc.subject.keyword Migration
dc.subject.keyword Matching frictions
dc.subject.keyword Small open economy
dc.relation.projectID info:eu-repo/grantAgreement/EC/H2020/649396
dc.rights.accessRights info:eu-repo/semantics/openAccess


This item appears in the following Collection(s)

Show simple item record

Search DSpace

Advanced Search


My Account


Compliant to Partaking