The Economic Impact of Immigration in Germany

We have combined a simple demographic model and the 58 sector econometric simulation and forecasting model INFORGE (Interindustry Forecasting Germany) which has been successfully used in different areas, e.g. modelling the effects of CO2 taxes and the liberalisation of the IT market on the German economy. The demographic model gives a forecast of the female and male age structure till the year 2010. INFORGE is part of the INFORUM International System that links 13 national Input-Output models on the sectoral level via export and import flows as well as the corresponding foreign trade prices. The model has a high degree of endogenization. Only some tax rates and the world market variables of the international INFORUM system are given exogenously. The high degree of endogenization has the advantage that in simulations the effects are depicted completely. The labour supply is modelled using the population module. The occupied population can be calculated by linking the age structure to the labour force participation rate of women and men for different age groups. So we have the possibility to simulate the effects of different migration scenarios on the German economy, assumed the structure of migration is constant over time.