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Global Aging and Fiscal Policy with International Labor Mobility: A Political Economy Perspective

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  • Mr. Mehmet S Tosun

Abstract

This paper uses an overlapping generations model with international labor mobility and a politically responsive fiscal policy to examine aging in developed and developing regions. Migrant workers change the political structure composed of young and elderly voters in both labor-receiving and labor-sending countries. Numerical simulations show that the developed region benefits more from international labor mobility through the contribution of migrant workers as laborers, savers, and voters. The developing region experiences significant growth in all specifications but benefits more under international capital mobility. Restricting political participation of migrant workers in the developed region produces inferior growth results.

Suggested Citation

  • Mr. Mehmet S Tosun, 2005. "Global Aging and Fiscal Policy with International Labor Mobility: A Political Economy Perspective," IMF Working Papers 2005/140, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2005/140
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    Cited by:

    1. Katarzyna Budnik, 2011. "Temporary migration in theories of international mobility of labour," Bank i Kredyt, Narodowy Bank Polski, vol. 42(6), pages 7-48.
    2. Krieger, Tim, 2005. "Renten und Zuwanderung: Ein Überblick über neue Ergebnisse der Forschung," Arbeitspapiere der Nordakademie 2005-04, Nordakademie - Hochschule der Wirtschaft.
    3. Zaiceva, A. & Zimmermann, K.F., 2016. "Migration and the Demographic Shift," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 119-177, Elsevier.
    4. Tosun, Mehmet S., 2011. "Demographic Divide and Labor Migration in the Euro-Mediterranean Region," IZA Discussion Papers 6188, Institute of Labor Economics (IZA).
    5. Şerife Genç İleri, 2019. "Selective immigration policy and its impacts on Canada's native‐born population: A general equilibrium analysis," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(3), pages 954-992, August.
    6. Mr. Lamin Y Leigh, 2006. "Hong Kong Special Administrative Region: Macroeconomic Impact of an Aging Population in a Highly Open Economy," IMF Working Papers 2006/087, International Monetary Fund.

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    More about this item

    Keywords

    WP; fiscal policy;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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