Immigration and Macroeconomic Outcomes in OECD Countries
Key Takeaways
- •The NBER study analyzed immigration and macroeconomic outcomes across OECD countries over a 34-year period from 1990 to 2024 using a novel dataset of net immigration rates from all global origins.
- •OECD nations experienced declining native population growth alongside rising net immigration, with the majority of arrivals originating from non-OECD countries and being predominantly high-skilled.
- •Traditional push factors, network effects, and policy indices explained very little of the cross-country variation in immigration flows, with unexpected shocks and migration surges serving as more common drivers.
- •High-skilled immigration from non-OECD countries was a significant predictor of GDP per worker growth, driven primarily by higher capital investment, faster human capital accumulation, and accelerated total factor productivity growth.
- •Native population growth showed either no effect or a weakly negative effect on GDP per capita and overall productivity, highlighting that the skill composition of immigration matters more than raw inflow size.
A new National Bureau of Economic Research (NBER) working paper investigates the relationship between immigration and macroeconomic outcomes across member states of the Organisation for Economic Co-operation and Development (OECD) from 1990 to 2024.
Authored by Gaetano Basso, Mitali R. Mathur, and Giovanni Peri, the research compiles a novel dataset of net immigration rates to OECD countries from all global origins. The data reveals that over the 34-year period, OECD nations experienced declining native population growth alongside rising net immigration. The majority of this immigrant influx originated from non-OECD countries and was predominantly composed of high-skilled individuals.
The authors note that traditional push factors, network effects, and policy indices explain very little of the significant cross-country heterogeneity observed in immigration dynamics. Instead, unexpected shocks and migration surges were found to be common drivers, underscoring how difficult it is for standard models to capture real-world migration flows across countries and over time.
To estimate the impact of immigration on economic growth, the researchers utilized local projections and several sources of identifying variation. They analyzed key economic metrics including growth in GDP per capita, labor productivity, capital investment, and total factor productivity (TFP).
The study finds that immigration from non-OECD countries served as a significant predictor of GDP per worker growth, an effect driven primarily by higher capital investment. Specifically, high-skilled immigration was strongly associated with faster human capital accumulation, accelerated TFP growth, and greater capital deepening. For policymakers and economists, that makes the composition of inflows as important as their size when assessing long-run macroeconomic effects.
In contrast, native population growth demonstrated either no effect or a weakly negative effect on GDP per capita and overall productivity. These findings align with a broader body of economic literature documenting the positive effects of immigration on economic growth and productivity, particularly when the influx is high-skilled.
The full research is available as an NBER working paper.