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Immigration and Social Security in Spain

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  • 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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References

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  1. Amuedo Dorantes, Catalina & De la Rica Goiricelaya, Sara, 2006. "Labor Market Assimilation of Recent Immigrants in Spain," DFAEII Working Papers 2006-01, University of the Basque Country - Department of Foundations of Economic Analysis II.
  2. Joan Gil & Miguel-Ángel López-García & Jorge Onrubia & Concepción Patxot & Guadalupe Souto, . "A Projection Model Of The Contributory Pension Expenditure Of The Spanish Social Security System: 2004-2050," Working Papers, Instituto de Estudios Fiscales 30-06 Classification-JEL , Instituto de Estudios Fiscales.
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  5. 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, FEDEA 2007-34, FEDEA.
  6. Alfonso R Sánchez-Martín & Virginia Sánchez Marcos, 2008. "Demographic change, pension reform and redistribution in Spain," Working Papers, Universidad Pablo de Olavide, Department of Economics 08.04, Universidad Pablo de Olavide, Department of Economics.
  7. Boldrin Michele & Jiménez-Martín Sergi & Peracchi Franco, 2001. "Sistema de pensiones y mercado de trabajo en España," Books, Fundacion BBVA / BBVA Foundation, Fundacion BBVA / BBVA Foundation, edition 1, number 201120.
  8. Agar Brugiavini & Franco Peracchi & David A. Wise, 2003. "Pensions and Retirement Incentives. A Tale of Three Countries: Italy, Spain and the USA," CEIS Research Paper, Tor Vergata University, CEIS 6, Tor Vergata University, CEIS.
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  11. Raquel Carrasco & Juan F. Jimeno & Ana Carolina Ortega, 2004. "The Effect Of Immigration On The Employment Opportunities Of Native-Born Workers: Some Evidence For Spain," Economics Working Papers, Universidad Carlos III, Departamento de Economía we046122, Universidad Carlos III, Departamento de Economía.
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  13. Izquierdo, Mario & Lacuesta, Aitor, 2007. "Wage inequality in Spain: recent developments," Working Paper Series, European Central Bank 0781, European Central Bank.
  14. Gruber, Jonathan & Wise, David A. (ed.), 2004. "Social Security Programs and Retirement around the World," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226310183, 01-2013.
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  17. Vincenzo Galasso, 2006. "The Political Future of Social Security in Aging Societies," MIT Press Books, The MIT Press, The MIT Press, edition 1, volume 1, number 0262072734, December.
  18. Jimeno, Juan F. & Rojas, Juan A. & Puente, Sergio, 2008. "Modelling the impact of aging on social security expenditures," Economic Modelling, Elsevier, Elsevier, vol. 25(2), pages 201-224, March.
  19. Mario Izquierdo & Juan F. Jimeno & Juan A. Rojas, 2007. "On the aggregate effects of immigration in Spain," Banco de Espa�a Working Papers, Banco de Espa�a 0714, Banco de Espa�a.
  20. Raquel Carrasco & Juan F. Jimeno & Ana Carolina Ortega, 2008. "The impact of immigration on the wage structure : Spain 1995-2002," Economics Working Papers, Universidad Carlos III, Departamento de Economía we080603, Universidad Carlos III, Departamento de Economía.
  21. : Michele Boldrin & : Sergi Jiménez-Martín & : Franco Peracchi, . "Micro-Modelling Of Retirement Behavior In Spain," Working Papers, Instituto de Estudios Fiscales 14-02 Classification-JEL , Instituto de Estudios Fiscales.
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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
  2. Repasando la Dinámica Reciente de la Población en España.
    by J. Ignacio Conde-Ruiz in Nada Es Gratis on 2014-07-17 08:02:11
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Conde Ruiz, José Ignacio. & Gonzalez, Clara I., 2012. "Reforma de pensiones 2011 en España: una primera valoración," Economic Reports, FEDEA 01-2012, FEDEA.
  2. J. Ignacio Conde-Ruiz & Clara I. González, 2013. "Reforma de pensiones 2011 en España," Hacienda Pública Española, IEF, IEF, vol. 204(1), pages 9-44, March.
  3. Suarez, Javier, 2010. "The Spanish Crisis: Background and Policy Challenges," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7909, C.E.P.R. Discussion Papers.
  4. Conde-Ruiz, J. Ignacio & Gonzalez, Clara I., 2012. "Spain 2011 Pension Reform," Working Papers, FEDEA 2012-03, FEDEA.

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