IDEAS home Printed from https://ideas.repec.org/p/dra/wpaper/200502.html
   My bibliography  Save this paper

Immigration, Integration and Fiscal Sustainability

Author

Abstract

Economic theory points out that immigration of even low-skilled immigrants may improve public finances in Western welfare states, and it is some times suggested that fiscal sustainability problems in Western countries caused by ageing populations could be solved by increasing immigration. We examine consequences of various immigration scenarios using the large-scale computable general equilibrium model DREAM describing the Danish economy. It turns out that increased immigration will generally worsen the Danish fiscal sustainability. Improved economic integration of immigrants and their descendants, however, may alleviate the problems of the public sector considerably.

Suggested Citation

  • Poul Schou, 2005. "Immigration, Integration and Fiscal Sustainability," DREAM Working Paper Series 200502, Danish Rational Economic Agents Model, DREAM.
  • Handle: RePEc:dra:wpaper:200502
    as

    Download full text from publisher

    File URL: http://www.dreammodel.dk/pdf/A2005_01.pdf
    File Function: First version, 2005
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hans Roodenburg & Rob Euwals & Harry ter Rele, 2003. "Immigration and the Dutch economy," CPB Special Publication 47, CPB Netherlands Bureau for Economic Policy Analysis.
    2. George J. Borjas, 2021. "The Economic Benefits from Immigration," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 13, pages 411-430, World Scientific Publishing Co. Pte. Ltd..
    3. Alexander Kemnitz, 2003. "Immigration, Unemployment and Pensions," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 31-48, March.
    4. David Coleman & Robert Rowthorn, 2004. "The Economic Effects of Immigration into the United Kingdom," Population and Development Review, The Population Council, Inc., vol. 30(4), pages 579-624, December.
    5. Holger Bonin & Bernd Raffelhüschen & Jan Walliser, 2000. "Can Immigration Alleviate the Demographic Burden?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(1), pages 1-21, September.
    6. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    7. Hans Roodenburg & Rob Euwals & Harry ter Rele, 2003. "Immigration and the Dutch economy," CPB Special Publication 47.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tim Krieger, 2014. "Public Pensions and Immigration," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(2), pages 10-15, 07.
    2. Masatoshi Jinno, 2013. "The impact of immigration under the defined-benefit pension system," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 28(21), pages 613-636.
    3. Michael Christl & Alain Bélanger & Alessandra Conte & Jacopo Mazza & Edlira Narazani, 2022. "Projecting the fiscal impact of immigration in the European Union," Fiscal Studies, John Wiley & Sons, vol. 43(4), pages 365-385, December.
    4. Murat G. Kirdar, 2012. "Estimating The Impact Of Immigrants On The Host Country Social Security System When Return Migration Is An Endogenous Choice," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(2), pages 453-486, May.
    5. Azarnert, Leonid V., 2018. "Refugee resettlement, redistribution and growth," European Journal of Political Economy, Elsevier, vol. 54(C), pages 89-98.
    6. Marianne Frank Hansen & Marie Louise Schultz-Nielsen & Torben Tranæs, 2017. "The fiscal impact of immigration to welfare states of the Scandinavian type," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 925-952, July.
    7. Johannes Berger & Thomas Davoine & Philip Schuster & Ludwig Strohner, 2016. "Cross-country differences in the contribution of future migration to old-age financing," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1160-1184, December.
    8. Marianne Frank Hansen & Marie Louise Schultz-Nielsen & Torben Tranæs, 2015. "The Impact of Immigrants on Public Finances: A Forecast Analysis for Denmark," DREAM Working Paper Series 201501, Danish Rational Economic Agents Model, DREAM.
    9. Hugo Benítez-Silva & Eva Cárceles-Poveda & Selçuk Eren, 2011. "Effects of Legal and Unauthorized Immigration on the U.S. Social Security System," Working Papers wp250, University of Michigan, Michigan Retirement Research Center.
    10. Javier Vazquez Grenno, 2010. "Spanish pension system: Population aging and immigration policy," Hacienda Pública Española / Review of Public Economics, IEF, vol. 195(4), pages 37-64, december.
    11. Mikkel Christoffer Barslund & Marten von Werder, 2016. "Measuring dependency ratios using National Transfer Accounts," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 14(1), pages 155-186.
    12. James P. Smith, 2018. "Taxpayer effects of immigration," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-11, October.
    13. Tim Krieger, 2014. "Public Pensions and Immigration," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(02), pages 10-15, July.
    14. Krieger, Tim, 2005. "Renten und Zuwanderung: Ein Überblick über neue Ergebnisse der Forschung," Arbeitspapiere der Nordakademie 2005-04, Nordakademie - Hochschule der Wirtschaft.
    15. Ian Preston, 2014. "The Effect of Immigration on Public Finances," Economic Journal, Royal Economic Society, vol. 124(580), pages 569-592, November.
    16. Michael Clemens, 2021. "The Fiscal Effect of Immigration: Reducing Bias in Influential Estimates," CESifo Working Paper Series 9464, CESifo.
    17. Gurgen Aslanyan, 2014. "The migration challenge for PAYG," Journal of Population Economics, Springer;European Society for Population Economics, vol. 27(4), pages 1023-1038, October.
    18. Marek Loužek, 2008. "Zachrání Evropu imigrace? [Will immigration save Europe?]," Politická ekonomie, Prague University of Economics and Business, vol. 2008(3), pages 362-379.
    19. Hur, Jinwook, 2020. "Immigration to Korea: A Fiscal Boon or Burden?," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 42(4), pages 27-58.
    20. Aurora A. C. Teixeira & N. Renuga Nagarajan & Sandra T. Silva, 2017. "The Impact of Ageing and the Speed of Ageing on the Economic Growth of Least Developed, Emerging and Developed Countries, 1990–2013," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 909-934, August.
    21. repec:ces:ifodic:v:12:y:2014:i:2:p:19116205 is not listed on IDEAS
    22. N. Renuga Nagarajan & Aurora A. C. Teixeira & Sandra T. Silva, 2021. "Ageing Population: Identifying the Determinants of Ageing in the Least Developed Countries," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 40(2), pages 187-210, April.
    23. Jan Ekberg, 2011. "Will Future Immigration to Sweden Make it Easier to Finance the Welfare System?," European Journal of Population, Springer;European Association for Population Studies, vol. 27(1), pages 103-124, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pawel Kaczmarczyk, 2013. "Are immigrants a burden for the state budget? Review paper," EUI-RSCAS Working Papers p0356, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    2. Kaczmarczyk, Pawel, 2015. "Burden or Relief? Fiscal Impacts of Recent Ukrainian Migration to Poland," IZA Discussion Papers 8779, Institute of Labor Economics (IZA).
    3. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    4. 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.
    5. Hugo Benítez-Silva & Eva Cárceles-Poveda & Selçuk Eren, 2011. "Effects of Legal and Unauthorized Immigration on the U.S. Social Security System," Working Papers wp250, University of Michigan, Michigan Retirement Research Center.
    6. 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, Department of Economics and Business Economics, Aarhus University.
    7. Govert E. Bijwaard, 2008. "Modeling Migration Dynamics of Immigrants," Tinbergen Institute Discussion Papers 08-070/4, Tinbergen Institute.
    8. Hendrik P. van Dalen & Kène Henkens, 2004. "The Rationality behind Immigration Preferences," Tinbergen Institute Discussion Papers 04-002/1, Tinbergen Institute.
    9. Victoria Chorny & Rob Euwals & Kees Folmer, 2007. "Immigration policy and welfare state design; a qualitative approach to explore the interaction," CPB Document 153, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    11. Hannah Zillessen, 2022. "Uncertainty, Citizenship & Migrant Saving Choices," Economics Series Working Papers 1008, University of Oxford, Department of Economics.
    12. Jan Ekberg, 2011. "Will Future Immigration to Sweden Make it Easier to Finance the Welfare System?," European Journal of Population, Springer;European Association for Population Studies, vol. 27(1), pages 103-124, February.
    13. Chand, Sheetal K. & Paldam, Martin, "undated". "The economics of immigration into a welfare state," Economics Working Papers 2003-18, Department of Economics and Business Economics, Aarhus University.
    14. Mari Kangasniemi & Merja Kauhanen, 2012. "Profiles of Estonian immigrants and their participation in the Finnish welfare system," Chapters, in: Peter Nijkamp & Jacques Poot & Mediha Sahin (ed.), Migration Impact Assessment, chapter 12, pages 387-416, Edward Elgar Publishing.
    15. Xavier Chojnicki & Frédéric Docquier & Lionel Ragot, 2011. "Should the US have locked heaven’s door?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(1), pages 317-359, January.
    16. Ottaviano, Gianmarco & Peri, Giovanni, 2008. "Immigration and National Wages: Clarifying the Theory and the Empirics," CEPR Discussion Papers 6916, C.E.P.R. Discussion Papers.
    17. Sari Pekkala Kerr & William R. Kerr & William F. Lincoln, 2015. "Skilled Immigration and the Employment Structures of US Firms," Journal of Labor Economics, University of Chicago Press, vol. 33(S1), pages 147-186.
    18. Gil Epstein & Shmuel Nitzan, 2006. "The struggle over migration policy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 19(4), pages 703-723, October.
    19. Jellal, Mohamed, 2014. "Diaspora et comportement économique en incertitude [Diaspora and economic behavior under uncertainty]," MPRA Paper 57236, University Library of Munich, Germany.
    20. Gabriel J Felbermayr & Wilhelm Kohler, 2014. "Immigration and Native Welfare," World Scientific Book Chapters, in: European Economic Integration, WTO Membership, Immigration and Offshoring, chapter 10, pages 335-372, World Scientific Publishing Co. Pte. Ltd..

    More about this item

    Keywords

    immigration; sustainable fiscal policy; CGE models;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dra:wpaper:200502. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Stephensen (email available below). General contact details of provider: https://edirc.repec.org/data/dreamdk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.