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Who is this, who enters there? - Migration in Italy and its effect on fiscal sustainability and pensions

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  • Bendetta Frassi
  • Christian Hagist
  • Fabio Pammolli

Abstract

Our paper estimates the impact of immigration on the sustainability of the Italian public finances using the methodology of Generational Accounting. We take into account socio-economic differences between the main migrants’ communities resident in Italy and we present three possible scenarios to reflect the potential economic degree of integration of foreigners in the Italian territory. Moreover, for each scenario we propose several options for migrants concerning both the length of permanence in Italy and the possible collection of retirement benefits. Our results show that the burden of current fiscal policy reduces as integration of the foreign-born increases. If migrants’ children are economically perfectly integrated, the fiscal gap is reduced from 71.9 to -15.3 percent of GDP.

Suggested Citation

  • Bendetta Frassi & Christian Hagist & Fabio Pammolli, 2017. "Who is this, who enters there? - Migration in Italy and its effect on fiscal sustainability and pensions," WHU Working Paper Series - Economics Group 17-01, WHU - Otto Beisheim School of Management.
    • Handle: RePEc:whu:wpaper:17-01
    as

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    File URL: https://nbn-resolving.org/urn:nbn:de:hbz:992-opus4-4062
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    References listed on IDEAS

    as
    1. Robert Rowthorn, 2008. "The fiscal impact of immigration on the advanced economies," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(3), pages 561-581, Autumn.
    2. 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.
    3. Luan, D. X. & Bauer, S. & Kuhl, R., 2016. "Income Impacts of Credit on Accessed Households in Rural Vietnam: Do Various Credit Sources Perform Differently?," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(1), pages 1-11, March.
    4. Dustmann, Christian, 2003. "Return migration, wage differentials, and the optimal migration duration," European Economic Review, Elsevier, vol. 47(2), pages 353-369, April.
    5. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    6. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1992. "Social Security and Medicare Policy from the Perspective of Generational Accounting," NBER Chapters, in: Tax Policy and the Economy, Volume 6, pages 129-145, National Bureau of Economic Research, Inc.
    7. Pietro Rizza & Pietro Tommasino, 2010. "Do We Treat Future Generations Fairly? Italian Fiscal Policy Through the Prism of Generational Accounting," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 69(2), pages 115-153, July.
    8. Flavia Coda Moscarola, 2001. "The Effects of Immigration Inflows on the Sustainability of the Italian Welfare States," CeRP Working Papers 06, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    accounting; economic integration; generations; migration; public pensions; social security;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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