The Fiscal Impact of Immigration in France: A Generational Accounting Approach

Abstract

The objective of this study is to use both static and dynamic frameworks to compare the benefits that immigrants draw from the public system with their contributions through the taxes that they pay. The main conclusion of this paper is that the impact of immigration on welfare systems is weak. Thus, if we compare, on a given date, immigrants' global contribution to the public administration budget with the volume of transfers they receive, immigrants appear to be relatively favoured by the redistribution system. At the same time, even if immigrants seem to pay less taxes and receive more transfers than natives, the difference in distribution between the two populations, with a higher concentration of immigrants in the active age groups and a sparser concentration among the net beneficiaries of the social transfer system, leads to a slightly positive long‐term impact of immigration on public finances. However, the impact of immigration remains very slight compared with the global effort that would have to be undertaken to reduce budgetary imbalances.

Impacts of Immigration on an Ageing Welfare State: An Applied General Equilibrium Model for France

“…These taxes are calibrated using the social protection accounts. We also distinguish two types of government spending (net of debt charges): non‐age‐specific public consumption and age‐specific transfers taken from Chojnicki (). The path of public debt is given exogenously and the equilibrium tax adjusts to balance the budget.…”

“…See Auerbach and Oreopoulos () on the United States, Bonin, Raffelhüschen and Walliser () on Germany, Collado, Iturbe‐Ormaetxe and Valera () on Spain, and Chojnicki ( and ) and Monso () on France.…”

The welfare impact of global migration in OECD countries

“…These effects will be referred to as the fiscal effects of migration, henceforth. Studies of the fiscal impact of migration use accounting models with exogenous wages and prices, or general equilibrium models with simple labor market interactions (see Chojnicki, 2013, Chojnicki et al, 2011, Dustmann and Frattini, 2014, Dustmann et al, 2010, Storesletten, 2000. 6 Third, international migration affects the aggregate demand for goods and services in the receiving and sending countries.…”

The Effect of Immigration on Public Finances

“…Lee and Miller (2000) suggest substantial net gains, especially from high-skilled immigration. For Europe, Collado et al (2004) find a significant, positive fiscal impact in Spain, Chojnicki (2013) finds a slightly positive impact in France, and Mayr (2005) finds a positive impact in Austria, all based on generational accounting exercises. For Europe, Collado et al (2004) find a significant, positive fiscal impact in Spain, Chojnicki (2013) finds a slightly positive impact in France, and Mayr (2005) finds a positive impact in Austria, all based on generational accounting exercises.…”