Fiscal Policy and Educational Attainment in the United States - A Generational Accounting Perspective

In this paper, we investigate the consequences of the rise in educational attainment on the US generational accounts. We build on the 1995 accounts of Gokhale and al. (1999) and disaggregate them per schooling level. We show that low skill newborns are characterized by a negative generational account (-15.4% of their lifetime labor income) whilst medium and high skill newborns have positive accounts (26.8% and 32.3% of their lifetime labor income). Compared to Gokhale et al., our baseline forecast is more optimistic. Nevertheless, the rise in educational attainment is not strong enough to restore the generational balance. The current fiscal policy generates a long-run deficit. Balancing the budget requires increasing taxes (by about 1.2%) or reducing transfers (by about 2.7%). These results are rather robust to growth and discounting assumptions as well as to the treatment of education spending. They are sensitive to assumptions about the schooling level of future generations.Generational accounting Human capital Fiscal policy

Labor Migration: Macroeconomic and Demographic Outlook for Europe and Neighbourhood Regions

In this paper, we assess the demographic and economic consequences of migrations in Europe and neighbourhood countries. In order to do so, we rely on a multi-region world overlapping generations model (INGENUE2). The rich modeling framework of this multi-regions model allows us to put into connection migration with the "triangular" relationship between population aging, pension reforms and international capital markets. With this model, we are also able to quantify the demographic and economic consequences of migration ows on both the regions receiving and losing migrants. Our analysis is based on a very detailed migration scenario between Western Europe and the Neighborhood regions constructed by taking into account both the current situation and some prospective empirical scenarios. Our quantitative results shed some light on the long term consequences of migration on regions that are not at the same stage in the ageing process. Concerning the regions receiving migrants, despite some improvement of their public pension system, it appears that our realistic migration scenario does not offset the effect of ageing in these regions, leaving room for pension reforms. Concerning the regions losing migrants, the adverse economic consequences of emigration appear to be all the more important than the region is advanced in the ageing process (and is already suffering from a declining population).CGEM, Migration, International capital ows, Neighbourhood policy

Labor Migration from East to West in the Context of European Integration and Changing Socio-political Borders

Labor migration from Eastern Europe and the member countries of Commonwealth of Independent States (CIS) to the Western countries became an important socio-economic issue. Since political systems and the nature of border management in these regions, migrations turned out to be a very complex and unpredictable issue. The purpose of this study is to analyze the region specific actors, practices and policies of migration in the Eastern countries, the possible scenarios and demographic consequences of the future migration flows. In order to address this issue properly, some of the complexities of labor migration phenomenon in the region are uncovered.Labor economics, demographic trends and forecast, immigration

Labor migration: Macroeconomic and demographic outlook for Europe and neighbourhood regions

In this paper, we assess the demographic and economic consequences of migrations in Europe and neighbourhood countries. In order to do so, we rely on a multi-region world overlapping generations model (INGENUE2). The rich modeling framework of this multi-regions model allows us to put into connection migration with the "triangular" relationship between population aging, pension reforms and international capital markets. With this model, we are also able to quantify the demographic and economic consequences of migration ows on both the regions receiving and losing migrants. Our analysis is based on a very detailed migration scenario between Western Europe and the Neighborhood regions constructed by taking into account both the current situation and some prospective empirical scenarios. Our quantitative results shed some light on the long term consequences of migration on regions that are not at the same stage in the ageing process. Concerning the regions receiving migrants, despite some improvement of their public pension system, it appears that our realistic migration scenario does not offset the effect of ageing in these regions, leaving room for pension reforms. Concerning the regions losing migrants, the adverse economic consequences of emigration appear to be all the more important than the region is advanced in the ageing process (and is already suffering from a declining population)

Réforme des retraites en France : évaluation de la mise en place d'un système par comptes notionnels

National audienceMalgré plusieurs réformes d'importance depuis le milieu des années 90, la pérennité financière du système français de retraite n'est pas assurée et soulève de nombreuses questions quant à l'évolution du niveau des retraites. Ce système, qui est basé sur le principe de la répartition n'a pas été conçu pour absorber un choc démographique comme celui que va connaître la population française à l'horizon du demi-siècle à venir. En effet, l'allongement continu de la durée de vie induit, en l'absence de réformes, un accroissement de la période de retraite qui pèse sur l'équilibre du système. Le départ massif à la retraite des générations du baby-boom entre 2005 et 2030 diminue fortement, en outre, le rapport du nombre de cotisants par retraité. Après plusieurs réformes paramétriques est aujourd'hui évoquée une réforme structurelle du système, conservant le principe de la répartition mais en la réorganisant pour passer à un système par comptes notionnels. Dans ce système, les pensions de chaque individu sont calculées de façon à égaliser la valeur des cotisations qu'il a versées et la valeur des pensions qu'il va recevoir au cours de sa période de retraite. Une telle réforme pourrait également être l'occasion de rendre plus homogène un système où coexistent une multitude de caisses aux règles de fonctionnement différentes, en lui substituant un système dont la gestion serait plus simple et transparente. Elle permettrait aussi de prendre en compte automatiquement, dans le calcul des pensions, tout accroissement de l'espérance de vie et toute modification du rythme de croissance économique

Should the US have locked the heaven's door? Reassessing the benefits of the postwar immigration

This paper examines the economic impact of the second great immigration wave (1945-2000) on the US economy. Contrary to recent studies, we estimate that immigration induced important net gains and small redistributive effects among natives. Our analysis relies on a computable general equilibrium model combining the major interactions between immigrants and natives (labor market impact, fiscal impact, capital deepening, endogenous education, endogenous inequality). We use a backsolving method to calibrate the model on historical data and then consider two counterfactual variants: a cutoff of all immigration flows since 1950 and a stronger selection policy. According to our simulations, the postwar US immigration is beneficial for all cohorts and all skill groups. These gains are closely related to a long-run fiscal gain and a small labor market impact of immigrants. Finally, we also demonstrate that all generations would have benefited from a stronger selection of immigrants

Macroeconomic Consequences of Global Endogenous Migration: A General Equilibrium Analysis

In this paper, we analyze the demographic and economic consequences of endogenous migrations flows over the coming decades in a multi-regions overlapping generations general equilibrium model (INGENUE 2) in which the world is divided in ten regions. Our analysis offers a global perspective on the consequences of international migration flows. The value-added of the INGENUE 2 model is that it enables us to analyze the effects of international migration on both the destination and the origin regions. A further innovation of our analysis is that international migration is treated as endogenous. In a first step, we estimate the determinants of migration in an econometric model. We show, in particular, that the income differential is one of the key variables explaining migration flows. In a second step, we endogenize migration flows in the INGENUE 2 model. In order to do so, we use the econometrically estimated relationships between demographic and income developments in the INGENUE model, which enables us to project long-run migration flows and to improve on projections of purely demographic models.CGEM, Migration, International capital flows

Bénéfices et coûts de l’immigration : les perspectives macroéconomiques d’une politique d’immigration active en France

Au début des années 2000 (Nations-Unies, 2000), le recours à une immigration de remplacement était avancé en réponse au déclin démographique annoncé (et en particulier celui de la population active). À cet objectif quantitatif est venue se greffer, quasiment de concert, l’ambition d’un contrôle qualitatif des flux d’entrées : l’immigration sélective. L’un des arguments affichés pour soutenir cette inflexion de la politique migratoire était une contribution nette aux finances publiques plus im..

Idées reçues sur l’immigration : une lecture économique

À la sortie d’une période électorale intense, la question de la « bonne » politique d’immigration s’est à nouveau retrouvée sur le devant de la scène à côté de celles portant sur la place de la France dans l’Europe ou de la réforme de la fiscalité. La controverse récente sur la levée des mesures transitoires qui limitent aux Roms l’accès au marché du travail est là pour rappeler que le débat est définitivement loin d’être clos