Skip to main content
SpringerLink
Log in

Immigration, integration and fiscal sustainability

  • Original Paper
  • Published:
Journal of Population Economics Aims and scope Submit manuscript

Abstract

Economic theory points out that immigration of even low-skilled immigrants may improve public finances in Western welfare states, and it is sometimes suggested that fiscal sustainability problems in Western countries caused by ageing populations could be solved by increasing immigration. We examine consequences of various immigration scenarios using the large-scale computable general equilibrium model Danish rational economic agents model describing the Danish economy. It turns out that increased immigration will generally worsen the Danish fiscal sustainability problem. Improved economic integration of immigrants and their descendants, however, may alleviate the problems of the public sector considerably.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7

Similar content being viewed by others

References

  • Bonin H, Raffelhüschen B, Walliser J (2000) Can immigration alleviate the demographic burden? Finanzarchiv 57(1):1–21

    Article  Google Scholar 

  • Borjas GJ (1994) The economics of immigration. J Econ Lit 32(4):1667–1717

    Google Scholar 

  • Coleman D, Rowthorn R (2004) The economic effects of immigration into the United Kingdom. Popul Dev Rev 30(4):579–624

    Article  Google Scholar 

  • Ederveen S, Dekker P, van der Horst A, Joosten W, van der Meer T, Tang P, Coenders M, Lubbers M, Nicolaas H, Scheepers P, Sprangers A, van der Valk J (2004) Destination Europe immigration and integration in the European Union. Annex to the state of the European Union 2005. CPB Netherlands Bureau for Economic Policy Analysis, The Hague

  • Kemnitz A (2003) Immigration, unemployment and pensions. Scand J Econ 105(1):31–47

    Article  Google Scholar 

  • Krieger T (2004) Fertility rates and skill distribution in Razin and Sadka's migration–pension model: a note. J Popul Econ 17(1):177–182

    Article  Google Scholar 

  • OECD (2004) Trends in international migration. OECD, Paris

    Google Scholar 

  • Razin A, Sadka E (2000) Unskilled migration: a burden or a boon for the welfare state? Scand J Econ 102(3):463–479

    Article  Google Scholar 

  • Roodenburg H, Euwals R, ter Rele H (2003) Immigration and the Dutch economy. Study report. CPB Netherlands Bureau for Economic Policy Analysis, The Hague

  • Storesletten K (2000) Sustaining fiscal policy through immigration. J Polit Econ 108(2):300–323

    Article  Google Scholar 

  • Storesletten K (2003) Fiscal implications of immigration—a net present value calculation. Scand J Econ 105(3):487–506

    Article  Google Scholar 

Download references

Acknowledgements

I wish to thank two anonymous referees for valuable comments and Martin Eggert, Cathrine Marie Gruno and Morten Lobedanz Sørensen for skilful research assistance.

Author information

Authors and Affiliations

  1. Danish Rational Economic Agents Model, Christiansborg Slotsplads 1, 1218, Copenhagen, Denmark

    Poul Schou

Authors
  1. Poul Schou
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Poul Schou.

Additional information

Responsible editor: Klaus F. Zimmermann

Rights and permissions

Reprints and permissions

About this article

Cite this article

Schou, P. Immigration, integration and fiscal sustainability. J Popul Econ 19, 671–689 (2006). https://doi.org/10.1007/s00148-005-0027-x

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s00148-005-0027-x

Keywords

JEL

Search

Navigation