Short- and mid-term macroeconomic and labour market impacts of migration in Austria: an agent-based modelling perspective

Strelkovskii, N. ORCID: https://orcid.org/0000-0001-6862-1768, Poledna, S., Conte, A., Goujon, A. ORCID: https://orcid.org/0000-0003-4125-6857, Linnerooth-Bayer, J., Michele, C., & Rovenskaya, E. ORCID: https://orcid.org/0000-0002-2761-3443 (2025). Short- and mid-term macroeconomic and labour market impacts of migration in Austria: an agent-based modelling perspective. In: Annual Conference of the Austrian Economic Association (NOeG) 2025, 23-24 September, 2025, Krems, Austria.

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Abstract

Large-scale migration events, driven by geopolitical instability, conflicts, and climate change, represent a significant challenge for advanced economies like Austria. Understanding the economic and labour market consequences of such influxes is essential for assessing economic resilience and enabling evidence-based policymaking. The existing literature typically employs equilibrium models or empirical “natural experiments” to provide insights, particularly regarding long-term impacts. However, there remains a need for analytical tools capable of capturing short-run dynamics, out-of-equilibrium adjustments, and detailed distributional effects across heterogeneous economic sectors and population groups.

This study investigates the potential short- to mid-term economic and labour market impacts of a large-scale, hypothetical yet plausible migration scenario in Austria. We simulate the arrival of 250,000 refugees over six quarters, inspired by Austria's 2015 experience. The primary objective is to assess the resilience of the Austrian economy and labour market to such a shock, focusing specifically on detailed macroeconomic outcomes and distributional effects across various population cohorts.

We employ a large-scale, empirically calibrated macroeconomic agent-based model (ABM). The ABM features interacting heterogeneous agents (households, firms, banks, government) operating with bounded rationality and behavioural heuristics across labour, credit, and goods/services markets via search-and-matching mechanisms. A key innovation is the highly disaggregated household sector, encompassing over 1,000 cohorts differentiated by sex, citizenship, activity status, and industry of occupation. Labour market transitions are governed by empirically estimated probabilities derived from Austrian register-based labour market career data. We compare the migration scenario against a baseline "no migration" scenario over a five-year simulation horizon.

The simulation results suggest that the Austrian economy exhibits potential resilience to the migration influx. It has a positive impact on aggregate GDP, with the GDP growth rate temporarily increasing by approximately 0.5 percentage points (p.p.) before returning to the baseline. However, GDP per capita initially drops by about 2% compared to the baseline and does not fully recover within the five-year timeframe. The additional burden on public debt is relatively modest, estimated at around 1 p.p. of GDP after five years. The labour market experiences a significant supply shock, causing the aggregate unemployment rate to increase from 6.6% to approximately 9.1%. Crucially, the impacts are highly heterogeneous:

(1) Natives are generally least affected by increased unemployment, followed by EU citizens, and then citizens of other countries. Refugees experience the largest initial increases, although their unemployment rates decrease significantly over time.

(2) Men experience slightly higher unemployment increases than women among native, EU, and other-country cohorts. Female refugees integrate notably better than male refugees.

(3) Impacts vary substantially across industries. For example, administrative and support services, as well as accommodation and food services, show the largest unemployment increases. Conversely, some industries show the capacity to absorb labour or even exhibit slight positive employment effects.

This study demonstrates the value of detailed ABMs in analysing the complex economic reality of migration. While the Austrian economy demonstrates resilience at the macro level, the short- to mid-term impacts involve a rise in aggregate unemployment and significant heterogeneity across population groups and industries. These distributional consequences underscore the need for targeted integration policies and labour market regulations that account for the differential effects of migration shocks. The ABM framework provides a powerful tool for exploring such nuances and informing policy design in response to contemporary migration challenges.

Item Type:	Conference or Workshop Item (Paper)
Research Programs:	Advancing Systems Analysis (ASA) Advancing Systems Analysis (ASA) > Cooperation and Transformative Governance (CAT) Advancing Systems Analysis (ASA) > Exploratory Modeling of Human-natural Systems (EM) Population and Just Societies (POPJUS) Population and Just Societies (POPJUS) > Equity and Justice (EQU)
Depositing User:	Luke Kirwan
Date Deposited:	07 Jan 2026 10:28
Last Modified:	07 Jan 2026 10:28
URI:	https://pure.iiasa.ac.at/21105

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