Artikel

Political Economy of Immigration and Fiscal Sustainability

This paper introduces a politico-economic model with a welfare state and immigration. In this model, policies on taxes and immigration are determined through a plurality voting system. While many studies of fiscal implications of immigration argue that relaxing immigration policies can substitute for tax reforms in an aging economy, I show that the democratic voting procedure can dampen the effect of relaxing immigration policies as desired policy reforms are not always implemented by the winner of an election. This political economy results in three types of social welfare losses. First, the skill composition is not balanced at a socially efficient level because workers are motivated to maximize their wages. Second, older retirees implement excessive taxes to maximize the size of the welfar e state. Third, the volume of immigration is lower than the optimallevel given the incentive by young workers to regain political power in the future.

Sprache
Englisch

Erschienen in
Journal: KDI Journal of Economic Policy ; ISSN: 2586-4130 ; Volume: 44 ; Year: 2022 ; Issue: 1 ; Pages: 1-47 ; Sejong: Korea Development Institute (KDI)

Klassifikation
Wirtschaft
Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
International Migration
Taxation, Subsidies, and Revenue: General
Geographic Labor Mobility; Immigrant Workers
Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
Thema
Immigration
Political Economy
Fiscal Sustainability

Ereignis
Geistige Schöpfung
(wer)
Hur, Jinwook
Ereignis
Veröffentlichung
(wer)
Korea Development Institute (KDI)
(wo)
Sejong
(wann)
2022

DOI
doi:10.23895/kdijep.2022.44.1.1
Handle
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

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Objekttyp

  • Artikel

Beteiligte

  • Hur, Jinwook
  • Korea Development Institute (KDI)

Entstanden

  • 2022

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