Regional Development

Migration and Regional Development


  • What's the issue?

In 2019, 5.3 million new permanent migrants settled in OECD countries, an increase of around a quarter since 2010. Migration is highly concentrated geographically, with more than half of the foreign-born population (53%) living in large metropolitan regions, compared to only 40% of natives. Migration has also increased faster in specific OECD regions such as capitals or regions with more dynamic labour markets.

To fully capitalise on the potential of migrants’ skills and talent, regions need to successfully integrate them into their labour markets. Therefore, it becomes essential to understand how migration flow affect local economies in an ever-changing world.                  


  • What can the OECD offer?

The OECD supports evidence-based policymaking that drives the successful integration of migrants into receiving regions’ economies. It conducts rigorous empirical analysis based on sound empirical analysis and share best practices to: i) craft actionable place-based policies to capitalize on migrant untapped potential; ii) measure how migrants contribute to regional economies and cities; iii) understand how local governments can harness migration in order to overcome pressing challenges such as population ageing or declining productivity.





Migrants are an essential part of the Australian population and contribute to economic growth and regional development. As of 2021, nearly a third of Australia's overall population was foreign-born (i.e., migrants). Of all OECD countries, only Switzerland and Luxembourg had higher shares of migrants. Migrants in Australia are, on average, highly educated and well-integrated into the labour market. In fact, migrants have a higher average educational attainment than individuals born in Australia (i.e., natives). This project finds that migrants contribute positively to regional labour productivity, employment growth for natives, and regional innovation.


This paper provides evidence on the impact of international migrants on regional innovation. The study combines administrative individual-level data covering all Australian residents with data on intellectual property rights applications such as patents, trademarks, and design rights. The analysis uses a standard shift-share instrument based on past migrant settlements to identify the causal effects of migration on innovation. Its four main findings are the following: First, on average, a one percentage point increase in the regional employment share of higher-educated migrants relative to total employment leads to a 4.8% rise in regional patent applications in the medium run (five years). Second, while migrants of all skill and education levels have a positive impact on patenting, those in scientific occupations have the largest effect. Third, regions with lower levels of patenting benefit relatively more from increases in migration compared to those with higher patenting levels. Fourth, there is no effect of migration on trademarks or design rights applications.


This paper provides novel evidence on the regional impact of international migration on native employment and wages in Australia, using unique administrative individual-level panel data covering all residents from 2011 to 2018. Employing a differences-in-differences estimation strategy and a well-established shift-share instrumental variable (IV) approach based on census data from 1981, the study addresses potential endogeneity concerns related to migrant settlement patterns. The analysis reveals a positive impact of migration on native employment across all skill levels, ages, and genders, while wages remain unaffected. Examining the drivers of the employment effect shows that the arrival of migrants leads to a substantial increase of newly employed natives in the region and a decrease in the number of previously employed natives, with the former outweighing the latter. Most of the dynamic results from geographic mobility rather than labour market transition.


This paper examines the contribution of international migrants to regional differences in labour productivity in Australia. The study relies on individual-level administrative wage data from 2011 to 2018. It finds that a region with a 10% larger migrant share has, on average, a 1.3% larger regional wage difference, which indicates a positive link between migration and labour productivity. The presence of migrants benefits native workers with different skill levels residing in all types of regions. The positive effects of migrants are even more pronounced for higher-skilled migrants. Concretely, a region with a 10% larger share of higher-skilled migrants has, on average, a 1% higher regional productivity difference. However, these additional benefits mainly accrue to more productive regions and those with higher migrant shares than the median region.


This paper provides novel evidence on the regional impact of immigration on native employment in a cross-country framework based on rich European Labour Force Surveys and past censuses data for 2010-2019. The paper finds a modest average impact of the rise in the share of immigrants across European regions on the employment-to-population rate of natives, but highly uneven effects over time and across workers and regions. The short-run estimates show adverse employment effects in response to immigration that nevertheless disappear in the longer run. High-school or less educated native workers experience employment losses due to immigration, whereas higher educated workers are more likely to experience employment gains. Moreover, the presence of institutions providing strict employment protection and high coverage of collective wage agreements exert a protective effect on native employment. Finally, the paper finds that regions experiencing strong growth can absorb immigrant workers, resulting in little or no effect on the native workforce, including in the short-run.


This paper offers an overview of recent trends in regional employment and productivity and describes the characteristics and geographic distribution of migrants in Australia. It shows that migrants in Australia are more likely to live in metropolitan regions and have much higher average education relative to native-born than in other OECD countries. Yet, despite their higher level of education, migrants have lower employment rates, mainly arising from a low labour market participation of foreign-born women. It also documents that regions with a higher share of migrants also have higher native employment rates and higher levels of labour productivity.


With many regions in OECD countries facing declining working age populations, the geographical dimension of migration has become crucial for regional development. This report aims to address these questions using two novel datasets that offer internationally comparable information on migration and migrants' labour market integration across cities, towns and rural areas in OECD countries. The report also analyses different dimensions of regional development and provides new evidence on how migrants contribute to regional income, innovation, international trade and labour markets. 


During COVID-19 lockdowns it became visible that migrants are often important in sectors that are crucial for the functioning of everyday life. Informed by this experience, this note provides an assessment of the role of foreign-born workers in essential services (referred to as migrant key workers) at regional level for 31 European countries. It examines the share of migrant key workers in regional labour markets, their importance in jobs with different skill requirements, and differences between EU and non-EU migrants. Migrants play a crucial role in health care, where 23% of doctors and 14% of nurses are foreign-born. In cities such as London or Brussels, around half of all doctors and nurses are migrants. Overall, capital regions have the highest share of migrant key workers (20%). Similarly, cities rely more on migrant key workers than other areas, especially in low-skilled occupations where migrants make up 25% of workers.




Past events

  • 21 June 2023: Regional Economics Seminar - Giovanni Peri (UC Davis) - Recording
  • 6 June 2023: Regional Economics Seminar – Maurice Kugler (George Mason University)
  • 3 May 2023: Hybrid workshop: Regional economics of migration – Recording (part 1, part 2)
  • 11 October 2023 Jan Stuhler (University of Carlos III,  Madrid) 
  • 13 December Anna Maria Mayda (Georgetown University) – Recording


For further information, please contact Cem Özgüzel, Economist, Economic Analysis, Data and Statistics Division


Please find Territorial Approach to Migrant and Refugee Integration


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