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Migration Challenge for PAYG

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  • Gurgen Aslanyan

Abstract

Immigration has been popularised in the economics literature as a tool to balance the troubled PAYG pension systems. A pivotal research by Razin and Sadka showed that unskilled immigration can surmount the pension problem and, further, boost the general welfare in the host economy. However a large strand of current economics literature is engaged in identifying mechanisms through which unskilled immigration, while solving the pension problem, causes undesired shifts in general welfare. This work shows that actually recurring unskilled immigration may challenge the entire pension system and decrease the pension benefits themselves.

Suggested Citation

  • Gurgen Aslanyan, 2012. "Migration Challenge for PAYG," FIW Working Paper series 101, FIW.
    • Handle: RePEc:wsr:wpaper:y:2012:i:101
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    References listed on IDEAS

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    1. Timothy Miller & Ronald Lee, 2000. "Immigration, Social Security, and Broader Fiscal Impacts," American Economic Review, American Economic Association, vol. 90(2), pages 350-354, May.
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    29. Assaf Razin & Efraim Sadka, 2000. "Unskilled Migration: A Burden or a Boon for the Welfare State?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 463-479, September.
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    Cited by:

    1. Zuzana Brokesova & Andrej Cupak & Gueorgui Kolev, 2017. "Financial literacy and voluntary savings for retirement in Slovakia," Working and Discussion Papers WP 10/2017, Research Department, National Bank of Slovakia.
    2. Assaf Razin & Efraim Sadka, 2014. "Migration and Welfare State: Why is America Different from Europe?," NBER Working Papers 20450, National Bureau of Economic Research, Inc.
    3. 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.
    4. Kojun Hamada & Akihiko Kaneko & Mitsuyoshi Yanagihara, 2022. "Fertility decline and a pay‐as‐you‐go pension system in a two‐sector model," Metroeconomica, Wiley Blackwell, vol. 73(2), pages 466-480, May.

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    More about this item

    Keywords

    Public Pensions; PAYG; Unskilled Migration;
    All these keywords.

    JEL classification:

    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • 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
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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