Will immigration in the future make it easier to support an ageing population?

Jan Ekberg ()
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Jan Ekberg: Centre for Labour Market Policy Research (CAFO), Postal: Centre for Labour Market Policy Research (CAFO), Linnaeus School of Business and Economics, Linnaeus University , SE 351 95 Växjö, Sweden

No 2010:1, CAFO Working Papers from Linnaeus University, Centre for Labour Market Policy Research (CAFO), School of Business and Economics

Abstract: Sweden and many other Western countries are facing a demographic development with an ageing population which will burden their public finances. Already today, the sum of yearly public expenditures in Sweden is about 50 percent of gross national product (GNP). Will future immigration alleviate the burden on the welfare system? Immigrants usually have a low proportion of old people and a high proportion of people of working age. Calculations for Sweden up to the year 2050 show, however, that the positive net fiscal contribution of immigrants is small even if they are well integrated on the labour market. The reason is that future immigration will increase the size of the population and thereby raise not only tax receipts but also public expenses. The fiscal impact is sensitive to immigrants’ integration into the labour market. If, for example, the rate of labour force participation of future immigrants will be the same as that of foreign born now living in Sweden, the fiscal consequences would be negative, but small also in that case. For most years up to 2050, the calculated positive/negative net contribution effect is less than one percent of GNP. The same positive net contribution could be achieved through a better integration of immigrants already living in Sweden.

Keywords: Demography; Forecasting; Immigration (search for similar items in EconPapers)
JEL-codes: J11 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2010-02-09
New Economics Papers: this item is included in nep-age, nep-lab and nep-mig
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