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Will immigration in the future make it easier to support an ageing population?

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  • Ekberg, Jan

    ()
    (Centre for Labour Market Policy Research (CAFO))

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    Abstract

    Sweden and many other Western countries are facing a demographic development with an ageing population which will burden their public finances. Already today, the sum of yearly public expenditures in Sweden is about 50 percent of gross national product (GNP). Will future immigration alleviate the burden on the welfare system? Immigrants usually have a low proportion of old people and a high proportion of people of working age. Calculations for Sweden up to the year 2050 show, however, that the positive net fiscal contribution of immigrants is small even if they are well integrated on the labour market. The reason is that future immigration will increase the size of the population and thereby raise not only tax receipts but also public expenses. The fiscal impact is sensitive to immigrants’ integration into the labour market. If, for example, the rate of labour force participation of future immigrants will be the same as that of foreign born now living in Sweden, the fiscal consequences would be negative, but small also in that case. For most years up to 2050, the calculated positive/negative net contribution effect is less than one percent of GNP. The same positive net contribution could be achieved through a better integration of immigrants already living in Sweden.

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    Bibliographic Info

    Paper provided by Centre for Labour Market Policy Research (CAFO), School of Business and Economics, Linnaeus University in its series CAFO Working Papers with number 2010:1.

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    Length: 19 pages
    Date of creation: 09 Feb 2010
    Date of revision:
    Handle: RePEc:hhs:vxcafo:2010_001

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    Postal: Centre for Labour Market Policy Research (CAFO), School of Business and Economics, Linnaeus University, SE 351 95 Växjö, Sweden
    Phone: +46 470 70 87 64
    Web page: http://lnu.se/research-groups/cafo?l=en
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    Keywords: Demography; Forecasting; Immigration;

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