Sustaining fiscal policy through immigration

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224 Scopus citations


Using a calibrated general equilibrium overlapping generations model, which explicitly accounts for differences between immigrants and natives, this paper investigates whether a reform of immigration policies alone could resolve the fiscal problems associated with the aging of the baby boom generation. Such policies are found to exist and are characterized by an increased inflow of working-age high-and medium-skilled immigrants. One particular feasible policy involves admitting 1.6 million 40-44-year-old high-skilled immigrants annually. These findings are illustrated by computing the discounted government gain of admitting additional immigrants, conditional on their age and skills.

Original languageEnglish (US)
Pages (from-to)300-323
Number of pages24
JournalJournal of Political Economy
Issue number2
StatePublished - 2000
Externally publishedYes


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