[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/tsu/tewpjp/2015-002.html
   My bibliography  Save this paper

Immigration as a Policy Tool for the Double Burden Problem of Prefunding Pay-as-you-go Social Security System

Author

Listed:
  • Hisahiro Naito
Abstract
The effect of accepting more immigrants on welfare in the presence of a pay-as-you-go social security system is analyzed theoretically and quantitatively in this study. First, it is shown that if intergenerational government transfers initially exist from the young to the old, the government can lead an economy to the (modified) golden rule level within a finite time in a Pareto-improving way by increasing the percentage of immigrants to natives (PITN). Second, by using the computational overlapping generation model, I calculate both the welfare gain of increasing the PITN from 15.5 percent to 25.5 percent in 80 years and the years needed to reach the (modified) golden rule level in a Pareto-improving way in a model economy. The simulation results show that the present discounted value of the Pareto-improving welfare gain of increasing the PITN is 23 percent of initial GDP. It takes 112 years for the model economy to reach the golden rule level in a Pareto-improving way.

Suggested Citation

  • Hisahiro Naito, 2015. "Immigration as a Policy Tool for the Double Burden Problem of Prefunding Pay-as-you-go Social Security System," Tsukuba Economics Working Papers 2015-002, Faculty of Humanities and Social Sciences, University of Tsukuba.
    • Handle: RePEc:tsu:tewpjp:2015-002
    as

    Download full text from publisher

    File URL: https://pepp.hass.tsukuba.ac.jp/RePEc/2015-002.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. repec:bla:scandj:v:102:y:2000:i:3:p:463-79 is not listed on IDEAS
    2. Pascal Belan & Pierre Pestieau, 1999. "Privatizing Social Security: A Critical Assessment," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 24(1), pages 114-130, January.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. John Geanakoplos & Olivia S. Mitchell & Stephen P. Zeldes, "undated". "Would a Privatized Social Security System Really Pay a Higher Rate of Return?," Pension Research Council Working Papers 98-6, Wharton School Pension Research Council, University of Pennsylvania.
    5. Shimasawa, Manabu & Oguro, Kazumasa, 2010. "Impact of immigration on the Japanese economy: A multi-country simulation model," Journal of the Japanese and International Economies, Elsevier, vol. 24(4), pages 586-602, December.
    6. Shinichi Nishiyama & Kent Smetters, 2007. "Does Social Security Privatization Produce Efficiency Gains?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1677-1719.
    7. Martin Feldstein, 1998. "Privatizing Social Security," NBER Books, National Bureau of Economic Research, Inc, number feld98-1.
    8. Michel, Philippe & Pestieau, P, 1993. "Population Growth and Optimality: When Does Serendipity Hold?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 6(4), pages 353-362, November.
    9. M. Dolores Collado & IÒigo Iturbe-Ormaetxe & Guadalupe Valera, 2004. "Quantifying the Impact of Immigration on the Spanish Welfare State," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(3), pages 335-353, May.
    10. Fabio Canova & Morten Ravn, 2000. "The Macroeconomic Effects of German Unification: Real Adjustments and the Welfare State," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(3), pages 423-460, July.
    11. Martin Feldstein & Andrew Samwick, 1998. "The Transition Path in Privatizing Social Security," NBER Chapters, in: Privatizing Social Security, pages 215-264, National Bureau of Economic Research, Inc.
    12. Hans Fehr & Sabine Jokisch & Laurence J. Kotlikoff, 2004. "The Role of Immigration in Dealing with the Developed World's Demographic Transition," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(3), pages 296-324, September.
    13. 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.
    14. Martin S. Feldstein, 2006. "The Effects of the Ageing European Population on Economic Growth and Budgets: Implications for Immigration and Other Policies," NBER Working Papers 12736, National Bureau of Economic Research, Inc.
    15. Ather H. Akbari, 1989. "The Benefits of Immigrants to Canada: Evidence on Tax and Public Services," Canadian Public Policy, University of Toronto Press, vol. 15(4), pages 424-435, December.
    Full references (including those not matched with items on IDEAS)

    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. Hisahiro Naito, 2013. "Pareto-improving Immigration and Its Effect on Capital Accumulation in the Presence of Social Security," Tsukuba Economics Working Papers 2013-004, Faculty of Humanities and Social Sciences, University of Tsukuba.
    2. Hisahiro Naito, 2014. "Pareto-improving Immigration and Its Effect on Capital Accumulation in the Presence of Social Security," Working Papers e081, Tokyo Center for Economic Research.
    3. Hisahiro Naito, 2014. "Pareto-improving Immigration in the Presence of Social Security," Tsukuba Economics Working Papers 2014-003, Faculty of Humanities and Social Sciences, University of Tsukuba.
    4. Attanasio, O. & Bonfatti, A. & Kitao, S. & Weber, G., 2016. "Global Demographic Trends," 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 179-235, Elsevier.
    5. Börsch-Supan, A. & Härtl, K. & Leite, D.N., 2016. "Social Security and Public Insurance," 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 781-863, Elsevier.
    6. 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.
    7. Axel Börsch‐Supan & Alexander Ludwig & Joachim Winter, 2006. "Ageing, Pension Reform and Capital Flows: A Multi‐Country Simulation Model," Economica, London School of Economics and Political Science, vol. 73(292), pages 625-658, November.
    8. Kathleen McKiernan, 2021. "Social Security Reform in the Presence of Informality," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 40, pages 228-251, April.
    9. Marko Köthenbürger & Panu Poutvaara, 2002. "Social Security Reform and Intergenerational Trade: Is there Scope for a Pareto-Improvement?," CESifo Working Paper Series 795, CESifo.
    10. Ben-Gad, M., 2012. "On deficit bias and immigration," Working Papers 12/09, Department of Economics, City University London.
    11. Kathleen McKiernan, 2021. "Social Security Reform in the Presence of Informality," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 40, pages 228-251, April.
    12. Hans Fehr & Christian Habermann & Fabian Kindermann, 2008. "Social Security with Rational and Hyperbolic Consumers," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 884-903, October.
    13. Pascal Belan & Philippe Michel & Bertrand Wigniolle, 2007. "Capital Accumulation, Welfare, and the Emergence of Pension-Fund Activism," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(1), pages 54-82, March.
    14. Bertrand Wigniolle & Philippe Michel & Pascal Belan, 2002. "Pension funds and capital accumulation," Economics Bulletin, AccessEcon, vol. 4(1), pages 1-8.
    15. Helmut Cremer & Pierre Pestieau, 1999. "Coping with the pension crisis: is it a demographic, financial or political problem?," CREPP Working Papers 9907, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
    16. Raei, Sepideh, 2020. "Gradual tax reforms: If you like it, you can keep it," Journal of Economic Dynamics and Control, Elsevier, vol. 111(C).
    17. 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).
    18. Ellen R. McGrattan & Edward C. Prescott, 2017. "On financing retirement with an aging population," Quantitative Economics, Econometric Society, vol. 8(1), pages 75-115, March.
    19. Mario Izquierdo & Juan Jimeno & Juan Rojas, 2010. "On the aggregate effects of immigration in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 1(4), pages 409-432, September.
    20. Fehr, Hans, 2016. "CGE modeling social security reforms," Journal of Policy Modeling, Elsevier, vol. 38(3), pages 475-494.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:tsu:tewpjp:2015-002. 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: Yoshinori Kurokawa (email available below). General contact details of provider: https://edirc.repec.org/data/iptsujp.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.