The impact of MENA-to-EU migration in the context of demographic change

We analyze the consequences of increasing MENA-to-EU migration on both sending and receiving regions. Using a general equilibrium model, we find that increasing MENA-to-EU migration generates significant changes in EU15 tax rates and income per capita. Compared to a non-selective immigration shock, selecting immigrants leads to a moderate reduction in tax rates, but to a greater impact on income per capita in the EU15. Emigration, especially if high-skilled, has a detrimental impact on MENA tax rates. Finally, the negative effects in MENA are mitigated if the brain drain leads to side-effects or is accompanied by increased education attainment at origin.