EconPapers    
Economics at your fingertips  
 

The Role of Immigration in Sustaining the Social Security System: A Political Economy Approach

Assaf Razin and Edith Sand ()

No 6302, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In the political debate people express the idea that immigrants are good because they can help pay for the old. The paper explores this idea in a dynamic political-economy setup. We characterize sub-game perfect Markov equilibria where immigration policy and pay-as-you-go (PAYG) social security system are jointly determined through a majority voting process. The main feature of the model is that immigrants are desirable for the sustainability of the social security system, because the political system is able to manipulate the ratio of old to young and thereby the coalition which supports future high social security benefits. We demonstrate that the older is the native born population the more likely is that the immigration policy is liberalized; which in turn has a positive effect on the sustainability of the social security system.

Keywords: Demographic stretegic voting; Overlapping generations; Social security sustainability (search for similar items in EconPapers)
JEL-codes: E1 H3 P1 (search for similar items in EconPapers)
Date: 2007-05
New Economics Papers: this item is included in nep-age, nep-dge, nep-mac, nep-mig, nep-pbe and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
https://cepr.org/publications/DP6302 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: The Role of Immigration in Sustaining the Social Security System: A Political Economy Approach (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:6302

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP6302

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2024-07-06
Handle: RePEc:cpr:ceprdp:6302