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Immigration and public finances in OECD countries

d’Albis, Hippolyte, Ekrame Boubtane and Dramane Coulibaly ()
Authors registered in the RePEc Author Service: Hippolyte d'Albis ()

Journal of Economic Dynamics and Control, 2019, vol. 99, issue C, 116-151

Abstract: This paper shows that the macroeconomic and fiscal consequences of international migration are positive for OECD countries, and suggests that international migration produces a demographic dividend by increasing the share of the workforce within the population. The estimation of a structural vector autoregressive model on a panel of 19 OECD countries over the period 1980–2015 reveals that a migration shock increases GDP per capita through a positive effect on both the ratio of working-age to total population and the employment rate. International migration also improves the fiscal balance by reducing the per capita transfers paid by the government and per capita old-age public spending. To rationalize these findings, an original theoretical framework is developed. This framework highlights the roles of both the demographic structure and intergenerational public transfers and shows that migration is beneficial to host economies characterized by aging populations and large public sectors.

Keywords: Immigration; Public finances; Overlapping-generation model; Panel VAR (search for similar items in EconPapers)
JEL-codes: E20 F22 J61 (search for similar items in EconPapers)
Date: 2019
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http://www.sciencedirect.com/science/article/pii/S0165188918303920
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Related works:
Working Paper: Immigration and public finances in OECD countries (2019)
Working Paper: Immigration and public finances in OECD countries (2019)
Working Paper: Immigration and public finances in OECD countries (2019)
Working Paper: Immigration and Public Finances in OECD Countries (2018) Downloads
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