Aging, Factor Returns, and Immigration Policy

In this note we analyze how aging affects immigration policy. We set up a dynamic political-economy model of representative democracy in which the government of the destination country sets the immigra- tion level to maximize aggregate welfare of the constituency. Aging, i.e. a decline in the growth...

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Bibliographic Details
Published in:MAGKS - Joint Discussion Paper Series in Economics (Band 26-2009)
Main Authors: Calahorrano, Lena, Lorz, Oliver
Format: Work
Language:English
Published: Philipps-Universität Marburg 2009
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Online Access:PDF Full Text
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Summary:In this note we analyze how aging affects immigration policy. We set up a dynamic political-economy model of representative democracy in which the government of the destination country sets the immigra- tion level to maximize aggregate welfare of the constituency. Aging, i.e. a decline in the growth rate of the native population, has an ex- pansionary effect on immigration. This immigration effect may even overcompensate the initial decline in population growth such that the total labor force grows more strongly and the capital stock per worker declines. We also compare our results to the social planner allocation and to the median-voter equilibrium.
Physical Description:8 Pages
ISSN:1867-3678
DOI:10.17192/es2024.0007