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Immigration and the Dutch disease A counterfactual analysis of the Norwegian resource boom 2004-2013

  • Ådne CappelenEmail author
  • Torbjørn Eika
Research Article
  • 1 Downloads

Abstract

We study how labour migration modified the Dutch disease effects during the Norwegian resource boom 2004–2013. In these years the resource movement effect of the petroleum industry was larger than the spending effect. This was mainly due to the introduction of a fiscal policy rule in 2001 that limited spending. The EU-enlargement in 2004 increased labour migration and affected also the Norwegian labour market. We find that economic growth in Norway was roughly doubled from 2004 to 2013 because of the resource boom while total population increased by 2% because of higher immigration. Moreover, both the resource movement and spending effects on Mainland GDP were roughly unaffected by immigration while employment increased, real wages fell and so did productivity. The negative effects of the boom on industries producing tradables were counteracted by endogenous terms of trade effects, immigration and demand effects of the boom.

Keywords

Dutch disease Immigration Population Productivity 

JEL Classification

B22 J11 Q33 

Notes

Acknowledgements

The project is financed by the Research Council of Norway, PETROSAM 2, grant 233687 (PROSPECTS). The authors thank T. Skjerpen, P. Boug and T. von Brasch for extensive comments on an earlier draft and two anonymous referees for their useful comments. All remaining errors are ours.

Compliance with Ethical Standards

Conflict of Interest

None.

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Research DepartmentStatistics NorwayOsloNorway

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