Immigration and Public Finances in OECD Countries

Hippolyte d'Albis, Ekrame Boubtane and Dramane Coulibaly

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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 work- force 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)
Date: 2018-12
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge, nep-int and nep-mig
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01955539v1
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: 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)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:halshs-01955539

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