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Fiscal Implications of Immigration - A Net Present Value Calculation -

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  • Storesletten, Kjetil

    () (Institute for International Economic Studies, Stockholm University)

Abstract

Focusing on the net fiscal effects, the gain from admitting immigrants is computed for a welfare state with large expenditures and a large tax burden (Sweden). Prices and behavior are held constant, which allows a detailed analysis of the effects of immigration. The present value of future tax revenues minus outlays is potentially large; USD 23,500 per young working-age immigrant, but an "average" new immigrant represents a net government loss of USD 20,500. The dominant factors are employment rates and age. For young working-age immigrants, the "break-even" participation rate for which the gain would be zero is 60%, well below the empirical rate for this group. Copyright The editors of the "Scandinavian Journal of Economics", 2003 .

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Bibliographic Info

Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 701.

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Length: 35 pages
Date of creation: 05 Dec 2001
Date of revision:
Publication status: Forthcoming in Scandinavian Journal of Economics.
Handle: RePEc:hhs:iiessp:0701

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Postal: Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden
Phone: +46-8-162000
Fax: +46-8-161443
Web page: http://www.iies.su.se/
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Keywords: fiscal; immigration;

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References

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  1. Persson, Torsten & Tabellini, Guido, 1999. "The Size and Scope of Government: Comparative Politics With Rational Politicians," CEPR Discussion Papers 2051, C.E.P.R. Discussion Papers.
  2. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies.
  3. Canova, Fabio & Ravn, Morten O., 1998. "Crossing the Rio Grande: Migrations, Business Cycles and the Welfare State," CEPR Discussion Papers 2040, C.E.P.R. Discussion Papers.
  4. Storesletten, Kjetil & Telmer, Chris I. & Yaron, Amir, 1999. "The risk-sharing implications of alternative social security arrangements," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 50(1), pages 213-259, June.
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Cited by:
  1. Ugur, Mehmet, 2007. "Migration without borders: the ethics, economics and governance of free movement," MPRA Paper 26007, University Library of Munich, Germany, revised Oct 2010.
  2. Hanson, Gordon H., 2009. "The Governance of Migration Policy," MPRA Paper 19178, University Library of Munich, Germany.
  3. Ben-Gad, M., 2012. "On deficit bias and immigration," Working Papers 12/09, Department of Economics, City University London.
  4. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2004. "Selection or Network Effects? Migration Flows into 27 OECD Countries, 1990-2000," IZA Discussion Papers 1104, Institute for the Study of Labor (IZA).
  5. 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.
  6. Bernt Bratsberg & Oddbjorn Raaum & Knut Roed, 2008. "When Minority Labor Migrants Meet the Welfare State," CReAM Discussion Paper Series 0817, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  7. Holzmann, Robert & Koettl, Johannes, 2011. "Portability of Pension, Health, and Other Social Benefits: Facts, Concepts, Issues," IZA Discussion Papers 5715, Institute for the Study of Labor (IZA).
  8. Robert Holzmann & Johannes Koettl, 2012. "Portability of Pension, Health, and other Social Benefits: Facts, Concepts, and Issues," CESifo Working Paper Series 4002, CESifo Group Munich.
  9. Robert Elliott & Joanne Kathryn Lindley, 2006. "Immigrant Wage Differentials, Ethnicity and Occupational Clustering," Working Papers 2006008, The University of Sheffield, Department of Economics, revised May 2006.
  10. Hendrik P. van Dalen & K�ne Henkens, 2004. "The Rationality behind Immigration Preferences," Tinbergen Institute Discussion Papers 04-002/1, Tinbergen Institute.
  11. Chand, Sheetal K. & Paldam, Martin, . "The economics of immigration into a welfare state," Economics Working Papers 2003-18, School of Economics and Management, University of Aarhus.
  12. Hendrik P. van Dalen & Kène Henkens, 2004. "The Rationality behind Immigration Preferences," Tinbergen Institute Discussion Papers 04-002/1, Tinbergen Institute.
  13. 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.
  14. Eberhard, Juan, 2012. "Immigration, Human Capital and the Welfare of Natives," MPRA Paper 37844, University Library of Munich, Germany.
  15. Ugur, Mehmet, 2008. "Economic implications of Turkish EU membership: the advantages of tying one’s hands," MPRA Paper 18547, University Library of Munich, Germany, revised 2009.

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