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The Impact of Immigration on the Japanese Economy: A multi-country simulation model

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  • SHIMASAWA Manabu
  • OGURO Kazumasa

Abstract

To quantify the impacts of immigration on the Japanese economy, we present a large-scale numerical dynamic equilibrium model with OLG and a total of 16 countries and regions, both those that are industrialized including Japan, the U.S. and EU, and developing countries China, Brazil, the Philippines and Peru. Our simulation results show that immigration will improve the Japanese economy. Specifically, annual immigrant flows of 150,000 will dramatically improve the welfare of current and future generations. On the other hand, we canft expect a significant long-run improvement in welfare solely by implementing a policy increasing the consumption tax. The results indicate that substantially increased inflows of working-age immigrants would alleviate the need for future fiscal reform and also help to dramatically reduce the public pension burden on the working generations.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 09020.

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Length: 75 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:eti:dpaper:09020

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  1. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies.
  2. Edward Whitehouse, 2007. "Pensions Panorama : Retirement-Income Systems in 53 Countries," World Bank Publications, The World Bank, number 7177, January.
  3. Okamoto, Akira, 2005. "Simulating progressive expenditure taxation in an aging Japan," Journal of Policy Modeling, Elsevier, vol. 27(3), pages 309-325, April.
  4. Hans Fehr & Sabine Jokisch & Laurence J. Kotlikoff, 2004. "The Role of Immigration in Dealing with the Developed World's Demographic Transition," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(3), pages 296-, September.
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