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Immigration and Social Security in Spain

  • Clara I. Gonzalez
  • José Ignacio Conde Ruiz
  • Michele Boldrin

The objective of this paper is to understand the impact of immigration on the Spanish pension system during the next fifty years by building aquantitative-theoretical framework. In order to carry out the exercise of projection of revenues and expenditures in the Spanish pension system, we have developed an Overlapping Generation Model where individuals differ by age, gender, skill and nationality. The Cohort Component Population Projection Method is used for the demographic projections, and for the labor market scenario we have simulated the full labor history of all of our different workers for the period-taking into account the future evolution of the educational levels and five possible situations during their labor history (employed, self-employed, unemployed, disable and inactive). In a first baseline scenario the system will be in deficit around year according to the last official estimations. The arrival of a large number of foreign workers is offering the Social Security System roughly five years of additional time to correct its important underlying unbalances. However after this period, the structural problems will come back and may be even magnified by the presence of an additional number of retired immigrants. Even if immigration reaches its total assimilation in the labor market it will not be sufficient to avoid that the pension system will be in deficit. However, immigration is allowing us to obtain very valuable additional time in order to carry out the necessary reforms.

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File URL: http://documentos.fedea.net/pubs/dt/2009/dt-2009-26.pdf
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Paper provided by FEDEA in its series Working Papers with number 2009-26.

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Date of creation: Jul 2009
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Handle: RePEc:fda:fdaddt:2009-26
Contact details of provider: Web page: http://www.fedea.net

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  1. Catalina Amuedo-Dorantes & Sara de la Rica, 2007. "Immigrants’ Responsiveness to Labor Market Conditions and their Impact on Regional Employment Disparities: Evidence from Spain," Working Papers 2007-34, FEDEA.
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  3. Joan Gil & Miguel Angel López García & Jorge Onrubia & Cío Patxot & Guadalupe Souto, 2007. "A projection model of the contributory pension expenditure of the spanish social security system: 2004-2050," Hacienda Pública Española, IEF, vol. 182(3), pages 75-116, September.
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  5. Balmaseda, Manuel & Melguizo, Angel & Taguas, David, 2006. "Las reformas necesarias en el sistema de pensiones contributivas en España
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    ," MPRA Paper 19574, University Library of Munich, Germany, revised 01 Mar 2006.
  6. Jimeno, Juan F. & Rojas, Juan A. & Puente, Sergio, 2008. "Modelling the impact of aging on social security expenditures," Economic Modelling, Elsevier, vol. 25(2), pages 201-224, March.
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  9. Dolado, Juan José & Peracchi, Franco & Jimeno, Juan F. & Boldrin, Michele, 1999. "The future of pension systems in europe: a reappraisal," UC3M Working papers. Economics 6153, Universidad Carlos III de Madrid. Departamento de Economía.
  10. Michele Boldrin & Sergi Jimenez-Martni & Franco Peracchi, 1997. "Social Security and Retirement in Spain," NBER Working Papers 6136, National Bureau of Economic Research, Inc.
  11. Carrasco, Raquel & Ortega, Ana Carolina & Jimeno, Juan F., 2004. "The effect of immigration on the employment opportunities of native-born workers : some evidence for Spain," UC3M Working papers. Economics we046122, Universidad Carlos III de Madrid. Departamento de Economía.
  12. repec:bbv:wpaper:0911 is not listed on IDEAS
  13. Michele Boldrin & Sergi Jiménez-Martín & Franco Peracchi, 2004. "Micro-Modeling of Retirement Behavior in Spain," NBER Chapters, in: Social Security Programs and Retirement around the World: Micro-Estimation, pages 499-578 National Bureau of Economic Research, Inc.
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  19. Javier Diaz-Gimenez & Julian Diaz-Saavedra, 2009. "Delaying Retirement in Spain," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 147-167, January.
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  22. Rafael Domenech & Ángel Melguizo, 2008. "Projecting Pension Expenditures in Spain: On Uncertainty, Communication and Transparency," Working Papers 0803, International Economics Institute, University of Valencia.
  23. Hipólito Simón & Esteban Sanromá & Raúl Ramos, 2008. "Labour segregation and immigrant and native-born wage distributions in Spain: an analysis using matched employer–employee data," Spanish Economic Review, Springer;Spanish Economic Association, vol. 10(2), pages 135-168, June.
  24. Alfonso SANCHEZ-MARTIN & Virginia SANCHEZ-MARCOS, . "Demographic Change, Pension Reform and Redistribution in Spain," EcoMod2008 23800123, EcoMod.
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