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Migration, Social Security, and Economic Growth

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  • Chen, Hung-Ju
  • Fang, I-Hsiang

Abstract

This paper studies the effect of population aging on economic performance in an overlapping-generations model with international migration. Fertility is endogenized so that immigrants and natives can have different fertility rates. Fertility is an important determinant to the tax burden of social security since it affects the quantity and quality of future tax payers. We find that introducing immigrants into the economy can reduce the tax burden of social security. If life expectancy (or the replacement ratio) is high enough, the growth rate of GDP per worker for an economy with international migration will be higher than for a closed economy. Regarding migration policies, our numerical results indicate that economic growth rate of GDP per worker will first decrease then increase as the flow of immigrants increases. Increasing the quality of immigrants will enhance economic growth.

Suggested Citation

  • Chen, Hung-Ju & Fang, I-Hsiang, 2011. "Migration, Social Security, and Economic Growth," MPRA Paper 30251, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:30251
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    References listed on IDEAS

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    4. Chepel, S. & Bondarenko, K., 2015. "Is the External Labor Migration an Economic Growth Factor: Econometric Analysis and Policy Implications for the CIS Countries," Journal of the New Economic Association, New Economic Association, vol. 28(4), pages 142-166.
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    6. Sajons, Christoph & Clots-Figueras, Irma, 2014. "Birthright citizenship and education - Do immigrant children need a passport to thrive?," VfS Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100470, Verein für Socialpolitik / German Economic Association.
    7. Emmanuel Apergis & Nicholas Apergis, 2022. "Reverse Immigration Effects for Expatriates in Oman During the COVID-19 Pandemic Shock," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 28(1), pages 19-37, May.

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    More about this item

    Keywords

    Economic growth; Fertility; Migration; Social security.;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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