The Migration Challenge: Labour Markets, Policy Reforms, and Social Cohesion

International migration is among the most important issues that have shaped the policy debates and political landscape in Europe in recent decades. Both the intra-European migration of workers and the influx of refugee migrants from outside Europe pose enormous economic and political challenges to Europe in the coming decades. This proposed research will investigate three key areas in which migration can have fundamental consequences for both economies and societies: (i) The Impact of Migration on Workers, Firms, and Productivity; (ii) Migration and the Rise of Populism; and (iii) Immigration, Integration and the Policies of the Welfare State. The specific questions to be addressed include: How does the policy of free mobility affect workers and firms in sending and receiving countries, through channels other than the standard demand-supply mechanism? How does immigration affect citizens’ voting behaviour? In particular, what are the roles of past and present economic circumstances and the media in driving the relationship? What are the intended and unintended, and immediate and long term effects of policy reforms on residency rights of and welfare transfers to refugee migrants? The research will combine innovative theoretical perspectives with state-of-the-art empirical analyses, exploiting linked employer-employee datasets and population registers, as well as previously unexplored data sources on voting and electoral outcomes to uncover important causal relations. All the proposed research questions, while focused on immigration, also speak to different core issues on the frontier of economics research, including inequality, rent sharing between firms and workers, productivity, political economy, and welfare reforms. The results of this investigation will thus not only provide relevant insights for contemporary immigration policies in Europe but deepen our core understanding of the economy that should reach well beyond it.