Global Aging and Fiscal Policy with International Labor Mobility : A Political Economy Perspective

Author/Editor:

Mehmet S Tosun

Publication Date:

July 1, 2005

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper uses an overlapping generations model with international labor mobility and a politically responsive fiscal policy to examine aging in developed and developing regions. Migrant workers change the political structure composed of young and elderly voters in both labor-receiving and labor-sending countries. Numerical simulations show that the developed region benefits more from international labor mobility through the contribution of migrant workers as laborers, savers, and voters. The developing region experiences significant growth in all specifications but benefits more under international capital mobility. Restricting political participation of migrant workers in the developed region produces inferior growth results.

Series:

Working Paper No. 05/140

Subject:

English

Publication Date:

July 1, 2005

ISBN/ISSN:

9781451861594/1018-5941

Stock No:

WPIEA2005140

Format:

Paper

Pages:

35

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