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Immigration and Pension Benefits in the Host Country

  • JUAN A. LACOMBA
  • FRANCISCO LAGOS

This paper examines the role that low-skilled immigration plays in determining pension benefits of the host population. With an overlapping-generations model which allows identifying which groups of native population are in favour or against immigration, we find that despite immigrants having low average productivity, an open borders policy would be implemented since most of current domestic cohorts gain from immigration. Only younger workers might be against immigration since they will coincide with immigrants in their retirement periods. Moreover, we show how a larger immigrant quota would increase the probability of a Pareto improvement for the current domestic population. Copyright (c) The London School of Economics and Political Science 2008.

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 77 (2010)
Issue (Month): 306 (04)
Pages: 283-295

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Handle: RePEc:bla:econom:v:77:y:2010:i:306:p:283-295
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  1. Krieger, Tim, 2003. " Voting on Low-Skill Immigration under Different Pension Regimes," Public Choice, Springer, vol. 117(1-2), pages 51-78, October.
  2. 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.
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  7. Lindbeck, Assar & Persson, Mats, 2002. "The Gains from Pension Reform," Seminar Papers 712, Stockholm University, Institute for International Economic Studies.
  8. CREMER, Helmuth & PESTIEAU, Pierre, . "Social insurance, majority voting and labor mobility," CORE Discussion Papers RP 1328, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  13. Hans-Werner Sinn, 2000. "EU Enlargement and the Future of the Welfare State," CESifo Working Paper Series 307, CESifo Group Munich.
  14. Haupt, Alexander & Peters, Wolfgang, 1998. " Public Pensions and Voting on Immigration," Public Choice, Springer, vol. 95(3-4), pages 403-13, June.
  15. Tim Krieger, 2004. "Fertility rates and skill distribution in Razin and Sadka’s migration-pension model: A note," Journal of Population Economics, Springer, vol. 17(1), pages 177-182, February.
  16. Tim Krieger, 2004. "Public pensions and immigration policy when voters are differently skilled," Public Economics 0411006, EconWPA.
  17. Juan Lacomba & Francisco Lagos, 2006. "Population aging and legal retirement age," Journal of Population Economics, Springer, vol. 19(3), pages 507-519, July.
  18. Scholten, Ulrich & Thum, Marcel, 1996. " Public Pensions and Immigration Policy in a Democracy," Public Choice, Springer, vol. 87(3-4), pages 347-61, June.
  19. Lagos Francisco & Lacomba Juan, 2005. "The Role of Immigration in the Retirement Age Reform : A Theoretical Analysis," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-20, September.
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