Migration, innovation and social welfare evidence from OECD countries

Abstract

Migration is a global topic that has a profound impact on various countries and societies. Using the panel vector autoregression (PVAR) model, this paper examines the impact of migration on innovation and social welfare in 35 OECD countries from 1995 to 2022. There is a positive effect of migration on innovation but a negative effect on social welfare, as represented by the real annual minimum wage. When further differentiating between countries of origin of migrants, it is found that migrants from non-OECD countries have the most pronounced effect on innovation in the country of relocation. Similarly, the negative impact of migration from non-OECDs on the real annual minimum wage in the migrating country is equally significant. The results suggest that differences in migration itself can lead to differential outcomes in the country of immigration.