Potential Economic Consequences of Migration Arising from Different Consumption Structures of Nationals and Immigrants: An Input-Output Approach

Abstract

The main purpose of this paper is to contribute for a better understanding of the potential economic consequences of migration that may arise from different consumption structures. To address this question, in a first step, the different consumption patterns of nationals and foreigners are measured, using data from a Family Income and Expenditure Survey in Portugal (Inquérito às Despesas das Famílias, 2010/2011). Households are grouped according to the proportion of foreigners and the consumption structures of these groups are determined and compared. This information is useful in assessing the differences in living conditions across national and migrant families. In a second step, the sectoral and macroeconomic impacts (in gross output, value added, GDP, imports and employment) of these different consumption structures are simulated, using an Input-Output approach, and they are also regionalized. These results allow us to project more accurately the potential demand led effects of a growing immigration flow to Portugal (both of workers and retirees) expected for the coming years by using foreign specific consumption structures.