Does the Calculation Hold? The Fiscal Balance of Migration to Denmark and Germany

Holger Hinte and Klaus Zimmermann ()

No 87, IZA Policy Papers from Institute of Labor Economics (IZA)

Abstract: Calculating the net fiscal effects of immigration not just for a fiscal year but over the lifespan of immigrant cohorts accentuates the assets and deficits in migration and integration policies and their long-term potential. The less national policies concentrate on a labor migrant selection process according to economic criteria, the higher the risk of generating economic losses or only a reduced surplus. A country comparison of net tax payments and generational accounts for migrants and natives reveals even more clearly that the right mix of migrants will give the best chance to maximize positive and sustainable net fiscal effects to the benefit of society. Similar socio-economic frameworks – as in the western welfare states of Denmark and Germany showcased in this paper – may still result in substantially different economic outcomes of migration. Traditional immigration countries with a long experience in selecting migrants are nonetheless confronted with the need to evaluate and adapt their policies. They may also learn from the results of net fiscal balancing.

Keywords: socio-economic effects of migration; generational accounting; immigrant selection; integration (search for similar items in EconPapers)
JEL-codes: E61 E62 F22 J61 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2014-07
New Economics Papers: this item is included in nep-eec, nep-mac, nep-mig and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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