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Migration Challenge for PAYG

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  • Gurgen Aslanyan

Abstract

Immigration has been popularised in the economics literature as a tool to balance the troubled PAYG pension systems. A pivotal research by Razin and Sadka showed that unskilled immigration can surmount the pension problem and, further, boost the general welfare in the host economy. However a large strand of current economics literature is engaged in identifying mechanisms through which unskilled immigration, while solving the pension problem, causes undesired shifts in general welfare. This work shows that actually recurring unskilled immigration may challenge the entire pension system and decrease the pension benefits themselves.

Suggested Citation

  • Gurgen Aslanyan, 2012. "Migration Challenge for PAYG," FIW Working Paper series 101, FIW.
    • Handle: RePEc:wsr:wpaper:y:2012:i:101
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    References listed on IDEAS

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    12. Tim Krieger, 2004. "Fertility rates and skill distribution in Razin and Sadka’s migration-pension model: A note," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(1), pages 177-182, February.
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    More about this item

    Keywords

    Public Pensions; PAYG; Unskilled Migration;
    All these keywords.

    JEL classification:

    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination

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