Immigration and Pension Benefits in the Host-country

Abstract

This paper examines the role that low-skilled immigrant labor force plays in determining the benefits of the public pension of the host population. With an overlapping-generations model in continuous time which allows to identify which groups of native population are better or worse off with immigration and a fully redistributive pension system, we find that the retirement benefits and hence the welfare levels of the host population are affected in a different way whether sharing or not pension benefits with immigrants. In this sense, the youngest local population may prefer, contrary to the oldest ones, a policy of closed borders.Immigration, welfare, pension benefits.