The Long-Term Growth Impact of Refugee Migration in Europe: A Case Study

Abstract

AbstractMany questions have been raised about the political and economic consequences of the recent surge in refugee immigration in Europe. Can refugee immigration promote long-term per capita growth? How are the drivers of per capita growth influenced by immigration? What are the policy implications of refugee immigration? Using an adjusted Cobb-Douglas production function, with labour divided into two complementary groups, this article attempts to provide some answers. By applying the model to current immigration data from Germany, this study finds that refugee immigration can lead to long-term per capita growth in the host country and that the growth is higher if refugee immigrants are relatively young and have sufficiently high qualifications. Further, capital inflows are a prerequisite for boosting per capita growth. These findings can inform policymakers of countries that continue to grapple with refugee immigration.