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Can immigrant employment alleviate the demographic burden? The role of union centralization

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  • Kemnitz, Alexander

Abstract

We examine how labor immigration affects public pensions under centralized wage setting. We show that immigration improves the sustainability of pay-as-you-go pensions if and only if total employment declines. This occurs if the labor demand elasticity exceeds the unemployment rate.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 99 (2008)
Issue (Month): 1 (April)
Pages: 123-126

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Handle: RePEc:eee:ecolet:v:99:y:2008:i:1:p:123-126

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Web page: http://www.elsevier.com/locate/ecolet

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  1. Alexander Kemnitz, 2003. "Immigration, Unemployment and Pensions," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 105(1), pages 31-48, 03.
  2. Hans-Werner Sinn, 1997. "The Value of Children and Immigrants in a Pay-As-You-Go Pension System: A Proposal for a Partial Transition to a Funded System," NBER Working Papers 6229, National Bureau of Economic Research, Inc.
  3. Tim Krieger, 2004. "Fertility rates and skill distribution in Razin and Sadka’s migration-pension model: A note," Journal of Population Economics, Springer, Springer, vol. 17(1), pages 177-182, February.
  4. Devereux, Michael B. & Lockwood, Ben, 1991. "Trade unions, non-binding wage agreements, and capital accumulation," European Economic Review, Elsevier, Elsevier, vol. 35(7), pages 1411-1426, October.
  5. CASAMATTA, Georges & CREMER, Helmuth & PESTIEAU, Pierre, 1999. "The political economy of social security," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 1999055, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Andreas Irmen & Berthold U. Wigger, 2000. "Trade Union Objectives and Economic Growth," CSEF Working Papers, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy 34, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  7. Clemens Fuest & Marcel Thum, 1999. "Welfare Effects of Immigration in a Dual Labor Market," CESifo Working Paper Series 215, CESifo Group Munich.
  8. Alexander Kemnitz, 2004. "Unemployment Insurance, Immigrants' Skills, and Native Earnings," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, Mohr Siebeck, Tübingen, vol. 60(1), pages 111-, April.
  9. Razin, A. & Sadka, E., 1999. "Unskilled Migration: a Burden or a Boon for the Welfare State?," Papers, Tel Aviv 8-99, Tel Aviv.
  10. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 108(2), pages 300-323, April.
  11. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, Oxford University Press, number 9780199279173, October.
  12. Razin, A. & Sadka, E., 1992. "Resisting Migration: Wage Rigidity and Income Redistribution," Papers, Tel Aviv 28-94, Tel Aviv.
  13. Corneo, Giacomo & Marquardt, Marko, 2000. "Public pensions, unemployment insurance, and growth," Journal of Public Economics, Elsevier, Elsevier, vol. 75(2), pages 293-311, February.
  14. Pierre Cahuc & André Zylberberg, 2004. "Labor Economics," MIT Press Books, The MIT Press, edition 1, volume 1, number 026203316x, December.
  15. Razin, Assaf & Sadka, Efraim, 1999. "Migration and pension with international capital mobility," Journal of Public Economics, Elsevier, Elsevier, vol. 74(1), pages 141-150, October.
  16. Schmidt, Christoph M. & Stilz, Anette & Zimmermann, Klaus F., 1994. "Mass migration, unions, and government intervention," Journal of Public Economics, Elsevier, Elsevier, vol. 55(2), pages 185-201, October.
  17. Casarico, Alessandra & Devillanova, Carlo, 2003. "Social security and migration with endogenous skill upgrading," Journal of Public Economics, Elsevier, Elsevier, vol. 87(3-4), pages 773-797, March.
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Cited by:
  1. Konrad, Kai A. & Skaperdas, Stergios, 2012. "The market for protection and the origin of the state," Munich Reprints in Economics, University of Munich, Department of Economics 13961, University of Munich, Department of Economics.
  2. Gurgen Aslanyan, 2012. "Migration Challenge for PAYG," FIW Working Paper series, FIW 101, FIW.

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