Global Aging and Fiscal Policy with International Labor Mobility: A Political Economy Perspective

Mehmet Tosun

No 4166, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper uses an overlapping generations model with international labor mobility and a politically responsive fiscal policy to examine aging in developed and developing regions. Migrant workers change the political structure composed of young and elderly voters in both labor-receiving and labor-sending countries. Numerical simulations show that the developed region benefits more from international labor mobility through the contribution of migrant workers as laborers, savers, and voters. The developing region experiences significant growth in all specifications but benefit more under international capital mobility. Restricting political participation of migrant workers in the developed region produces inferior growth results.

Keywords: population aging; overlapping generations; endogenous fiscal policy; international labor mobility; international capital mobility (search for similar items in EconPapers)
JEL-codes: E62 F21 F22 F43 H30 J10 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-05
New Economics Papers: this item is included in nep-age, nep-dge, nep-mac, nep-mig and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Global Aging and Fiscal Policy with International Labor Mobility: A Political Economy Perspective (2005)
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