IDEAS home Printed from https://ideas.repec.org/p/iza/izapps/pp87.html
   My bibliography  Save this paper

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

Author

Listed:
  • Hinte, Holger

    (IZA)

  • Zimmermann, Klaus F.

    (University of Bonn)

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.

Suggested Citation

  • Hinte, Holger & Zimmermann, Klaus F., 2014. "Does the Calculation Hold? The Fiscal Balance of Migration to Denmark and Germany," IZA Policy Papers 87, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izapps:pp87
    as

    Download full text from publisher

    File URL: https://docs.iza.org/pp87.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. John P. Haisken-DeNew & Felix Büchel & Gert G. Wagner, 1997. "Assimilation and Other Determinants of School Attainment in Germany: Do Immigrant Children Perform as Well as Germans?," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 66(1), pages 169-179.
    2. Ather H. Akbari, 1989. "The Benefits of Immigrants to Canada: Evidence on Tax and Public Services," Canadian Public Policy, University of Toronto Press, vol. 15(4), pages 424-435, December.
    3. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1991. "Generational Accounts: A Meaningful Alternative to Deficit Accounting," NBER Chapters, in: Tax Policy and the Economy, Volume 5, pages 55-110, National Bureau of Economic Research, Inc.
    4. Hans Roodenburg & Rob Euwals & Harry ter Rele, 2003. "Immigration and the Dutch economy," CPB Special Publication 47, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Svend E. Hougaard Jensen & Ulrik Nødgaard & Lars Haagen Pedersen, 2002. "Fiscal Sustainability and Generational Burden Sharing in Denmark," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 28, pages 43-60.
    6. Holger Bonin, 2002. "Eine fiskalische Gesamtbilanz der Zuwanderung nach Deutschland," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(2), pages 215-229.
    7. Fertig, Michael & Schmidt, Christoph M., 2001. "First- and Second-Generation Migrants in Germany - What Do We Know and What Do People Think," IZA Discussion Papers 286, Institute of Labor Economics (IZA).
    8. Torun Österberg & Björn Gustafsson, 2001. "Immigrants and the public sector budget - accounting exercises for Sweden," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(4), pages 689-708.
    9. Riphahn, Regina, 1999. "Immigrant Participation in Social Assistance Programs: Evidence from German Guestworkers," CEPR Discussion Papers 2318, C.E.P.R. Discussion Papers.
    10. repec:bla:scandj:v:94:y:1992:i:2:p:303-18 is not listed on IDEAS
    11. Schmidt, Christoph M., 1997. "Immigrant performance in Germany: Labor earnings of ethnic German migrants and foreign guest-workers," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(Supplemen), pages 379-397.
    12. Hans-Werner Sinn & Gebhard Flaig & Martin Werding & Sonja Munz & Nicola Düll & Herbert Hofmann, 2001. "EU enlargement and labour-force migration: Proposals for a gradual convergence of labour markets," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 2, March.
    13. M. Dolores Collado & IÒigo Iturbe-Ormaetxe & Guadalupe Valera, 2004. "Quantifying the Impact of Immigration on the Spanish Welfare State," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(3), pages 335-353, May.
    14. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
    15. repec:bla:revinw:v:47:y:2001:i:3:p:379-98 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marianne Frank Hansen & Marie Louise Schultz-Nielsen & Torben Tranæs, 2015. "The Impact of Immigrants on Public Finances: A Forecast Analysis for Denmark," DREAM Working Paper Series 201501, Danish Rational Economic Agents Model, DREAM.
    2. Zaiceva, A. & Zimmermann, K.F., 2016. "Migration and the Demographic Shift," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 119-177, Elsevier.
    3. Robert C. M. Beyer, 2016. "The Labor Market Performance of Immigrants in Germany," IMF Working Papers 2016/006, International Monetary Fund.
    4. Bedaso, Fenet, 2021. "The Labor Market Integration of Refugees and other Migrants in Germany," GLO Discussion Paper Series 884, Global Labor Organization (GLO).
    5. Simone Maxand & Hend Sallam, 2024. "Local Fiscal Effects of Immigration in Germany," CESifo Working Paper Series 11162, CESifo.
    6. Sallam, Hend & Christl, Michael, 2024. "Do Migrants Pay Their Way? A Net Fiscal Analysis for Germany," GLO Discussion Paper Series 1530, Global Labor Organization (GLO).
    7. Marianne Frank Hansen & Marie Louise Schultz-Nielsen & Torben Tranæs, 2017. "The fiscal impact of immigration to welfare states of the Scandinavian type," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(3), pages 925-952, July.
    8. Michael Christl & Alain Bélanger & Alessandra Conte & Jacopo Mazza & Edlira Narazani, 2022. "Projecting the fiscal impact of immigration in the European Union," Fiscal Studies, John Wiley & Sons, vol. 43(4), pages 365-385, December.
    9. Robert C. M. Beyer, 2017. "The Performance of Immigrants in the German Labor Market," SOEPpapers on Multidisciplinary Panel Data Research 892, DIW Berlin, The German Socio-Economic Panel (SOEP).
    10. Carlo V. Fiorio & Tommaso Frattini & Andrea Riganti & Michael Christl, 2024. "Migration and public finances in the EU," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(3), pages 635-684, June.
    11. Holger Hinte, 2014. "What determines the net fiscal effects of migration?," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-78, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Holger Bonin, 2002. "Eine fiskalische Gesamtbilanz der Zuwanderung nach Deutschland," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(2), pages 215-229.
    2. Pawel Kaczmarczyk, 2013. "Are immigrants a burden for the state budget? Review paper," EUI-RSCAS Working Papers p0356, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    3. Kaczmarczyk, Pawel, 2015. "Burden or Relief? Fiscal Impacts of Recent Ukrainian Migration to Poland," IZA Discussion Papers 8779, Institute of Labor Economics (IZA).
    4. Euwals, Rob & Dagevos, Jaco & Gijsberts, Mérove & Roodenburg, Hans, 2007. "Immigration, Integration and the Labour Market: Turkish Immigrants in Germany and the Netherlands," IZA Discussion Papers 2677, Institute of Labor Economics (IZA).
    5. Karin Mayr, 2004. "The fiscal impact of immigrants in Austria--a generational accounting analysis," Economics working papers 2004-09, Department of Economics, Johannes Kepler University Linz, Austria.
    6. Christoph M. Schmidt, 2002. "Sozialstaat und Migration: empirische Evidenz und wirtschaftspolitische Implikationen für Deutschland," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(2), pages 173-186.
    7. Brücker, Herbert & Ringer, Sebastian, 2008. "Ausländer in Deutschland: Vergleichsweise schlecht qualifiziert," IAB-Kurzbericht 200801, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Fertig, Michael & Schmidt, Christoph M., 2003. "Mobility within Europe - The Attitudes of European Youngsters," RWI Discussion Papers 1, RWI - Leibniz-Institut für Wirtschaftsforschung.
    9. Victoria Chorny & Rob Euwals & Kees Folmer, 2007. "Immigration policy and welfare state design; a qualitative approach to explore the interaction," CPB Document 153, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Christoph M. Schmidt & Michael Fertig, 2002. "Mobility within Europe – The Attitudes of European Youngsters," RWI Discussion Papers 0001, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
    11. Thomas K. Bauer, 2002. "Migration, Sozialstaat und Zuwanderungspolitik," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(2), pages 249-271.
    12. Bonin, Holger, 2001. "Fiskalische Effekte der Zuwanderung nach Deutschland - Eine Generationenbilanz," IZA Discussion Papers 305, Institute of Labor Economics (IZA).
    13. Rob Euwals & Hans Roodenburg & J. Dagevos & M. Gijsberts, 2006. "Immigration, integration and the labour market; Turkish immigrants in Germany and the Netherlands," CPB Discussion Paper 75, CPB Netherlands Bureau for Economic Policy Analysis.
    14. Fertig, Michael & Schmidt, Christoph M., 2002. "Mobility within Europe – What do we (still not) know?," IZA Discussion Papers 447, Institute of Labor Economics (IZA).
    15. repec:zbw:rwidps:0001 is not listed on IDEAS
    16. Anna-Elisabeth Thum, 2014. "Labor Market Integration of German Immigrants and Their Children: Does Personality Matter?," SOEPpapers on Multidisciplinary Panel Data Research 723, DIW Berlin, The German Socio-Economic Panel (SOEP).
    17. Thomas Bauer & Mathias Sinning, 2011. "The savings behavior of temporary and permanent migrants in Germany," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(2), pages 421-449, April.
    18. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2004. "Selection or Network Effects? Migration Flows into 27 OECD Countries, 1990-2000," IZA Discussion Papers 1104, Institute of Labor Economics (IZA).
    19. Sebastian Gundel & Heiko Peters, "undated". "Assimilation and Cohort Effects for German Immigrants," Working Papers 200123, Institute of Spatial and Housing Economics, Munster Universitary.
    20. Xavier Chojnicki, 2013. "The Fiscal Impact of Immigration in France: A Generational Accounting Approach," The World Economy, Wiley Blackwell, vol. 36(8), pages 1065-1090, August.
    21. Zaiceva, A. & Zimmermann, K.F., 2016. "Migration and the Demographic Shift," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 119-177, Elsevier.

    More about this item

    Keywords

    socio-economic effects of migration; generational accounting; immigrant selection; integration;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izapps:pp87. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.