The macro economic impact of immigration on the Maltese economy : a VAR approach

Abstract

This dissertation examines the impact of economic migration on the labour market and the economy in general, with regards to its impact on the unemployment rate, real wage rate and the real GDP. Although a vast literature has studied the impact of immigration flows on the labour market, the impact of immigration on standard macroeconomic variables has not been examined systematically. As such, this dissertation tries to fill in this gap by testing the hypotheses that were formed based on the findings from the literature. In the empirical part of this dissertation, an insignificant impact on the labour market as well as on the growth rate of real GDP, in the long run, was found. Despite the limitations of this analysis, these results can be useful particularly as the debate of immigration in Malta moves rapidly towards center-stage.