EJEEP – European Journal of Economics and Economic Policies. Intervention
Published in Print: March 2021 – DOI: 10.4337/ejeep.2021.0074
Migrant inflows, capital outflows, growth and distribution:
should we control capital rather than immigration?
Emiliano Brancaccio, Andrea Califano, Fabiana De Cristofaro *
Abstract. Liberalization policies of international movements of capital and labour have represented a crucial feature of the so-called “globalization” era. More recently, however, several restrictions on migratory movements have been adopted to face the alleged negative effects of immigration. On the contrary, free movement of capital has almost always been preserved. This paper aims at verifying whether this current framework of international economic policy can be justified in economic terms. We propose an unprecedented direct comparison between the macroeconomic and distributive impacts of “extreme” episodes of net capital outflows and net migrant inflows in OECD countries between 1970 and 2016. Applying a fixed effects approach and an event-study approach, we show that GDP growth and functional income distribution have null or even positive statistical relationships with immigration, while they have largely negative statistical relationships with capital flights. More specifically, extreme migrant inflows are not related or in some cases positively related with real GDP growth, real GDP per capita growth and the wage share, while extreme capital outflows are negatively related with real GDP growth and real GDP per capita growth. These results contrast with current policy agendas and seem to suggest that controls should concern capital movements rather than migratory flows of people.
JEL classification: F21, F22, F32, F62, F68.
Keywords: migrant inflows, capital outflows, GDP growth, GDP per capita, wage share, controls of capital movement or immigration.
* Emiliano Brancaccio (Università del Sannio, Benevento, Italy). Andrea Califano (Università di Milano, Italy), Fabiana De Cristofaro (Scuola Superiore Sant’Anna, Pisa, Italy). We would like to thank Eduardo A. Cavallo, Giorgio Fagiolo, Gennaro Zezza and two anonymous reviewers for their useful comments and suggestions. The usual discalimers apply.