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Role of Migration in Pension Integration within the European Union

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  • Thomas Poufinas

    (Democritus University of Thrace)

Abstract

Although the European Union has made notable steps towards completion of the economic and monetary union, fiscal convergence, banking union and capital markets union, potential integration of pensions and social security has not advanced as much. As the European Union countries have experienced increased migration/refugee flows over the last decade, the question is whether migrants/refugees can influence the adequacy of member-state pension schemes and potentially allow for a Pan-European Pension Plan. Consequently, the purpose of this paper is to investigate, as a prelude to pension integration, whether immigration and emigration affect pension assets, liabilities, and the asset-liability gap and to identify the determinants of this gap. Using generalized method of moments estimation, evidence is found that increases in immigration and decreases in emigration (as a percent of the population) lead to an increase in the assets of autonomous pension funds. Analogously, increases in valid permits (as a percent of the population) and decreases in unemployment (as a percent of the labor force) result in a decrease in liabilities (benefits) of autonomous pension funds. The novelties of this study are the identification of factors that affect pension assets, liabilities and the asset-liability gap at a country level and the contribution of immigration from non-EU countries to closing the asset-liability gap. The findings can be used to draft pension and migration policies at a pan-European level.

Suggested Citation

  • Thomas Poufinas, 2021. "Role of Migration in Pension Integration within the European Union," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 27(4), pages 303-319, November.
  • Handle: RePEc:kap:iaecre:v:27:y:2021:i:4:d:10.1007_s11294-022-09843-w
    DOI: 10.1007/s11294-022-09843-w
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    More about this item

    Keywords

    Pension; Social security; Asset; Liability; Migrants; Refugees;
    All these keywords.

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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