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Immigration and Pension Benefits in the Host Country

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  • JUAN A. LACOMBA
  • FRANCISCO LAGOS

Abstract

This paper examines the role that low-skilled immigration plays in determining pension benefits of the host population. With an overlapping-generations model which allows identifying which groups of native population are in favour or against immigration, we find that despite immigrants having low average productivity, an open borders policy would be implemented since most of current domestic cohorts gain from immigration. Only younger workers might be against immigration since they will coincide with immigrants in their retirement periods. Moreover, we show how a larger immigrant quota would increase the probability of a Pareto improvement for the current domestic population. Copyright (c) The London School of Economics and Political Science 2008.

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Bibliographic Info

Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 77 (2010)
Issue (Month): 306 (04)
Pages: 283-295

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Handle: RePEc:bla:econom:v:77:y:2010:i:306:p:283-295

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References

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  1. Assaf Razin & Efraim Sadka, 1995. "Population Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262181606, December.
  2. Scholten, Ulrich & Thum, Marcel, 1996. " Public Pensions and Immigration Policy in a Democracy," Public Choice, Springer, vol. 87(3-4), pages 347-61, June.
  3. Lagos Francisco & Lacomba Juan, 2005. "The Role of Immigration in the Retirement Age Reform : A Theoretical Analysis," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-20, September.
  4. CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, 1999. "The political economy of social security," CORE Discussion Papers 1999055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Razin, Assaf & Sadka, Efraim, 2000. " Unskilled Migration: A Burden or a Boon for the Welfare State?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 463-79, June.
  6. Lindbeck, Assar & Persson, Mats, 2002. "The Gains from Pension Reform," Seminar Papers 712, Stockholm University, Institute for International Economic Studies.
  7. Cremer, Helmuth & Pestieau, Pierre, 1998. "Social insurance, majority voting and labor mobility," Journal of Public Economics, Elsevier, vol. 68(3), pages 397-420, June.
  8. Sinn, Hans-Werner, 2002. "EU Enlargement and the Future of the Welfare State," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(1), pages 104-15, February.
  9. Razin, Assaf & Sadka, Efraim, 1999. "Migration and pension with international capital mobility," Journal of Public Economics, Elsevier, vol. 74(1), pages 141-150, October.
  10. Juan Lacomba & Francisco Lagos, 2006. "Population aging and legal retirement age," Journal of Population Economics, Springer, vol. 19(3), pages 507-519, July.
  11. Peter Diamond, 2004. "Social Security," American Economic Review, American Economic Association, vol. 94(1), pages 1-24, March.
  12. Tim Krieger, 2008. "Public pensions and return migration," Public Choice, Springer, vol. 134(3), pages 163-178, March.
  13. Tim Krieger, 2004. "Fertility rates and skill distribution in Razin and Sadka’s migration-pension model: A note," Journal of Population Economics, Springer, vol. 17(1), pages 177-182, February.
  14. Haupt, Alexander & Peters, Wolfgang, 1998. " Public Pensions and Voting on Immigration," Public Choice, Springer, vol. 95(3-4), pages 403-13, June.
  15. Tim Krieger, 2004. "Public pensions and immigration policy when voters are differently skilled," Public Economics 0411006, EconWPA.
  16. Sheetal K. Chand & Martin Paldam, 2004. "The economics of immigration into a Nordic welfare state - and a comparison to an immigration state and a guest worker state," Economics Working Papers 2004-4, School of Economics and Management, University of Aarhus.
  17. Slobodan Djajić, 2003. "Assimilation of immigrants: Implications for human capital accumulation of the second generation," Journal of Population Economics, Springer, vol. 16(4), pages 831-845, November.
  18. Leers, Theo & Meijdam, Lex & Verbon, Harrie A. A., 2004. "Ageing, migration and endogenous public pensions," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 131-159, January.
  19. Krieger, Tim, 2003. " Voting on Low-Skill Immigration under Different Pension Regimes," Public Choice, Springer, vol. 117(1-2), pages 51-78, October.
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Citations

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Cited by:
  1. Assaf Razin, 2013. "Migration into the Welfare State: Tax and Migration Competition," NBER Working Papers 19346, National Bureau of Economic Research, Inc.
  2. Gurgen Aslanyan, 2012. "Immigration Control & Long-Run Population Welfare," CERGE-EI Working Papers wp453, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  3. Tim Krieger, 2008. "Public pensions and return migration," Public Choice, Springer, vol. 134(3), pages 163-178, March.
  4. Krieger, Tim, 2005. "Renten und Zuwanderung: Ein Überblick über neue Ergebnisse der Forschung," Arbeitspapiere der Nordakademie 2005-04, Nordakademie - Hochschule der Wirtschaft.
  5. Catia Batista & Janis Umblijs, 2013. "Migration, Risk Attitudes, and Entrepreneurship: Evidence from a Representative Immigrant Survey," CReAM Discussion Paper Series 1325, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  6. Tim Krieger, 2014. "Public Pensions and Immigration," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 12(2), pages 10-15, 07.

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