NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Migration-Regime Liberalization and Social Security: Political-Economy Effect

Assaf Razin, Edith Sand

NBER Working Paper No. 15013
Issued in May 2009
NBER Program(s):   IFM   PE

The pay-as-you-go social security system, increasingly burdened by dwindling labor force, can benefit from immigrants whose birth rates exceed those of the native born birth. The paper examines adynamic political-economy mechanism through which the social security system influences the young decisive voter's attitudes in favor of a more liberal immigration regime. A Markov equilibrium with social security consists of a more liberal migration policy, than a corresponding equilibrium with no social security. Thus, the social security system effectively provides an incentive to liberalize migration policy through a political-economy mechanism.

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