Will Eastern European Migrants Happily Enter the German Pension System after the EU Eastern Enlargement?
A major concern in Western Europe and especially in Germany is that with the EU eastern enlargement inflows of workers occur, which will be net beneficiaries of the domestic social security systems. We introduce a model and present evidence by comparing pension systems in the main source and target countries (Poland, Hungary, Czech Republic; Germany) that show that immigrants most likely have to face a burden from entering the German pension system. Only if the total number of immigrants is sufficiently large the burden may change into a gain. We conclude that if migration takes place, it will do so despite – not because of – the existence of the pension systems.
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