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Immigration and Social Security in Spain

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Author Info

  • Clara I. Gonzalez
  • José Ignacio Conde Ruiz
  • Michele Boldrin

Abstract

The objective of this paper is to understand the impact of immigration on the Spanish pension system during the next fifty years by building aquantitative-theoretical framework. In order to carry out the exercise of projection of revenues and expenditures in the Spanish pension system, we have developed an Overlapping Generation Model where individuals differ by age, gender, skill and nationality. The Cohort Component Population Projection Method is used for the demographic projections, and for the labor market scenario we have simulated the full labor history of all of our different workers for the period-taking into account the future evolution of the educational levels and five possible situations during their labor history (employed, self-employed, unemployed, disable and inactive). In a first baseline scenario the system will be in deficit around year according to the last official estimations. The arrival of a large number of foreign workers is offering the Social Security System roughly five years of additional time to correct its important underlying unbalances. However after this period, the structural problems will come back and may be even magnified by the presence of an additional number of retired immigrants. Even if immigration reaches its total assimilation in the labor market it will not be sufficient to avoid that the pension system will be in deficit. However, immigration is allowing us to obtain very valuable additional time in order to carry out the necessary reforms.

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Bibliographic Info

Paper provided by FEDEA in its series Working Papers with number 2009-26.

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Date of creation: Jul 2009
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Handle: RePEc:fda:fdaddt:2009-26

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Web page: http://www.fedea.es

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References

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  1. Catalina Amuedo-Dorantes & Sara de la Rica, 2007. "Labour Market Assimilation of Recent Immigrants in Spain," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 257-284, 06.
  2. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies.
  3. Hipólito Simón & Esteban Sanromá & Raúl Ramos, 2008. "Labour segregation and immigrant and native-born wage distributions in Spain: an analysis using matched employer–employee data," Spanish Economic Review, Springer, vol. 10(2), pages 135-168, June.
  4. Mario Izquierdo & Juan Jimeno & Juan Rojas, 2010. "On the aggregate effects of immigration in Spain," SERIEs, Spanish Economic Association, vol. 1(4), pages 409-432, September.
  5. Rafael Domenech & Ángel Melguizo, 2008. "Projecting Pension Expenditures in Spain: On Uncertainty, Communication and Transparency," Working Papers 0803, International Economics Institute, University of Valencia.
  6. Gruber, Jonathan (ed.), 2004. "Social Security Programs and Retirement around the World," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226310183, March.
  7. Joan Gil & Miguel Angel López García & Jorge Onrubia & Cío Patxot & Guadalupe Souto, 2007. "A projection model of the contributory pension expenditure of the spanish social security system: 2004-2050," Hacienda Pública Española, IEF, vol. 182(3), pages 75-116, September.
  8. Javier Diaz-Gimenez & Julian Diaz-Saavedra, 2009. "Delaying Retirement in Spain," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 147-167, January.
  9. Michele Boldrin & Sergi Jimenez-Martni & Franco Peracchi, 1997. "Social Security and Retirement in Spain," NBER Working Papers 6136, National Bureau of Economic Research, Inc.
  10. Sergi Jiménez-Martín & Alfonso R. Sánchez, 2003. "An evaluation of the life-cycle effects of minimum pensions on retirement behavior," Economics Working Papers 715, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2006.
  11. Raquel Carrasco & Juan F. Jimeno & Ana Carolina Ortega, 2008. "The impact of immigration on the wage structure : Spain 1995-2002," Economics Working Papers we080603, Universidad Carlos III, Departamento de Economía.
  12. Vincenzo Galasso, 2008. "The Political Future of Social Security in Aging Societies," MIT Press Books, The MIT Press, edition 1, volume 1, number 026257246x.
  13. Alfonso R Sánchez-Martín & Virginia Sánchez Marcos, 2008. "Demographic change, pension reform and redistribution in Spain," Working Papers 08.04, Universidad Pablo de Olavide, Department of Economics.
  14. Raquel Carrasco & Juan Ramón García & Ana Carolina Ortega, . "The Effect of Immigration on the Employment Opportunities of Native-Born Workers: Some Evidence for Spain," Working Papers 2004-17, FEDEA.
  15. Michele Boldrin & Sergi Jiménez-Martín & Franco Peracchi, 2004. "Micro-Modeling of Retirement Behavior in Spain," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 499-578 National Bureau of Economic Research, Inc.
  16. Boldrin Michele & Jiménez-Martín Sergi & Peracchi Franco, 2001. "Sistema de pensiones y mercado de trabajo en España," Books, Fundacion BBVA / BBVA Foundation, edition 1, number 201120, July.
  17. Mario Izquierdo & Aitor Lacuesta, 2007. "Wage inequality in Spain - recent developments," Working Paper Series 781, European Central Bank.
  18. Juan F. Jimeno & Juan A. Rojas & Sergio Puente, 2006. "Modeling the impact of aging on social security expenditures," Banco de España Occasional Papers 0601, Banco de España.
  19. Catalina Amuedo-Dorantes & Sara de la Rica, 2007. "Immigrants’ Responsiveness to Labor Market Conditions and their Impact on Regional Employment Disparities: Evidence from Spain," Working Papers 2007-34, FEDEA.
  20. Sanchez-Marcos, Virginia & Sanchez-Martin, Alfonso R., 2006. "Can social security be welfare improving when there is demographic uncertainty?," Journal of Economic Dynamics and Control, Elsevier, vol. 30(9-10), pages 1615-1646.
  21. Balmaseda, Manuel & Melguizo, Angel & Taguas, David, 2006. "Las reformas necesarias en el sistema de pensiones contributivas en España
    [Reforming the Spanish contributory pension system]    ," MPRA Paper 19574, University Library of Munich, Germany, revised 01 Mar 2006.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Irse para Volver
    by J. Ignacio Conde-Ruiz in Nada Es Gratis on 2012-10-25 06:00:24
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Cited by:
  1. Suarez, Javier, 2010. "The Spanish Crisis: Background and Policy Challenges," CEPR Discussion Papers 7909, C.E.P.R. Discussion Papers.
  2. Conde-Ruiz, J. Ignacio & Gonzalez, Clara I., 2012. "Spain 2011 Pension Reform," Working Papers 2012-03, FEDEA.
  3. Conde Ruiz, José Ignacio. & Gonzalez, Clara I., 2012. "Reforma de pensiones 2011 en España: una primera valoración," Economic Reports 01-2012, FEDEA.

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