Abstract
Immigration to Western Europe has increased dramatically since the 1970’s but the relationship between migration, GDP per capita, and unemployment is understudied in most Western European countries. I employ panel data from OECD databases, Eurostat and Insee for 14 Western European countries and use seemingly unrelated regression models and Granger causality tests to determine whether changes in net migration predict changes in host country economic outcomes or vice versa. I find that changes in the net migration rate predict economically significant changes in GDP per capita and unemployment in several European countries. However, there are both positive and negative predicted effects in different countries, meaning that European countries do not react homogenously to migration. Changes in GDP per capita and unemployment also predict both positive and negative changes in net migration in different European countries, but the predicted changes are too small to be economically relevant.