Immigration and the pension system in Spain

Juan Rojas

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: In this paper we use a large overlapping generations model with individuals that differ across age, productivity and native status to assess the effects on the pension system of different immigration quotas in the context of an aging population by computing how much should social security taxes be rised in order to pay for the pension burden in two model economies. The first one is the standard model pioneered by Auerbach and Kotlikoff (1987) where skilled and unskilled workers are perfect substitutes in the production process. In the second model economy, individuals with different skill levels are imperfect substitutes as in Canova and Ravn (1998). The main result of the paper is that half of the reduction of the social security tax rate associated with immigration in the standard model is lost when skilled and unskilled individual are imperfect substitutes. Consequently, the standard model with perfect substitution overestimates the ability of immigration inflows to sustain the pension system in Spain.

Date: 2002-09
New Economics Papers: this item is included in nep-com and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://e-archivo.uc3m.es/rest/api/core/bitstreams ... 81985a1ec4f6/content (application/pdf)

Related works:
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:cte:werepe:we023916

Access Statistics for this paper

More papers in UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía
Bibliographic data for series maintained by Ana Poveda ().