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Immigration and Social Security in Spain

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  • Clara I. Gonzalez
  • José Ignacio Conde Ruiz
  • Michele Boldrin

Abstract

The objective of this paper is to understand the impact of immigration on the Spanish pension system during the next fifty years by building aquantitative-theoretical framework. In order to carry out the exercise of projection of revenues and expenditures in the Spanish pension system, we have developed an Overlapping Generation Model where individuals differ by age, gender, skill and nationality. The Cohort Component Population Projection Method is used for the demographic projections, and for the labor market scenario we have simulated the full labor history of all of our different workers for the period-taking into account the future evolution of the educational levels and five possible situations during their labor history (employed, self-employed, unemployed, disable and inactive). In a first baseline scenario the system will be in deficit around year according to the last official estimations. The arrival of a large number of foreign workers is offering the Social Security System roughly five years of additional time to correct its important underlying unbalances. However after this period, the structural problems will come back and may be even magnified by the presence of an additional number of retired immigrants. Even if immigration reaches its total assimilation in the labor market it will not be sufficient to avoid that the pension system will be in deficit. However, immigration is allowing us to obtain very valuable additional time in order to carry out the necessary reforms.

Suggested Citation

  • Clara I. Gonzalez & José Ignacio Conde Ruiz & Michele Boldrin, 2009. "Immigration and Social Security in Spain," Working Papers 2009-26, FEDEA.
    • Handle: RePEc:fda:fdaddt:2009-26
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Irse para Volver
      by J. Ignacio Conde-Ruiz in Nada Es Gratis on 2012-10-25 11:00:24
    2. Repasando la Dinámica Reciente de la Población en España.
      by J. Ignacio Conde-Ruiz in Nada Es Gratis on 2014-07-17 13:02:11

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    Cited by:

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    2. Díaz-Giménez, Javier & Díaz-Saavedra, Julián, 2017. "The future of Spanish pensions," Journal of Pension Economics and Finance, Cambridge University Press, vol. 16(2), pages 233-265, April.
    3. Russo, Giuseppe & Salsano, Francesco, 2019. "Electoral systems and immigration," European Journal of Political Economy, Elsevier, vol. 60(C).
    4. J. Ignacio Conde-Ruiz & Clara I. González, 2016. "From Bismarck to Beveridge: the other pension reform in Spain," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 7(4), pages 461-490, November.
    5. J. Ignacio Conde-Ruiz & Clara I. González, 2013. "Reforma de pensiones 2011 en España," Hacienda Pública Española / Review of Public Economics, IEF, vol. 204(1), pages 9-44, March.
    6. Conde-Ruiz, J. Ignacio & Gonzalez, Clara I., 2012. "Spain 2011 Pension Reform," Working Papers 2012-03, FEDEA.
    7. Mari Kangasniemi & Matilde Mas & Catherine Robinson & Lorenzo Serrano, 2012. "The economic impact of migration: productivity analysis for Spain and the UK," Journal of Productivity Analysis, Springer, vol. 38(3), pages 333-343, December.
    8. Javier Suarez, 2010. "The Spanish Crisis: Background and Policy Challenges," Working Papers wp2010_1005, CEMFI.
    9. Conde Ruiz, José Ignacio. & Gonzalez, Clara I., 2012. "Reforma de pensiones 2011 en España: una primera valoración," Economic Reports 01-2012, FEDEA.

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