Cross-country differences in the contribution of future migration to old-age financing

As life expectancy increases and fertility declines, population aging puts pressure on the financing of welfare states in Europe and other developed countries. Given that immigrant workers are younger than the domestic population, a continuous flow of immigrants reduces the old-age dependency ratio and improves financing. Existing general equilibrium estimates of the public finance contribution of migration, performed with different models, are not comparable across countries and sometimes differ even in sign. We use the same overlapping-generations model with a detailed representation of institutions and labor market activity to provide comparable estimates of the impact of immigration on public finance in four European countries. We find that future projected immigration flows are equivalent to 14.3 % points labor income taxes in Austria, 7.3 points in Germany, 6.2 points in the UK and 1.7 points in Poland in 2060. These differences are due to the projected volume of immigration and institutional setups, among other factors. For comparable volumes of immigration, future flows have largest impact in Germany and smallest in the UK.     

MIGRATION into the WELFARE STATE: tax and migration competition

Despite big gains from easing restrictions on international labor mobility, liberalizing migration flows is not pursued unilaterally or negotiated among countries in a way that international trade negotiations are pursued. Among several key explanations is the fiscal burden imposed by immigration on native-born. The paper focuses on a central tension faced by policy makers in countries that receive migrants from lower wage countries. Such countries are typically high productivity and capital rich, and the resulting high wages attract both skilled and unskilled migrants. A generous welfare state may attract low-skill migration deter skilled migration, since it is likely to be accompanied by higher redistributive taxes. Assuming that a group of host countries faces an upward supply of immigrants, the analysis demonstrates that tax competition does not indeed lead to a race to the bottom; competition may lead to higher taxes than coordination. There exists a fiscal externality (fiscal leakage) that causes tax rates (on both labor and capital), and the volume of migration (of both skill types), to be higher in the competitive regime than in the coordinated regime.     

Immigration and the pattern of public spending: evidence from OECD countries

Using a panel of OECD countries, we show that immigration systematically alters the composition of public spending in the destination country. To mitigate bias from the endogenous sorting of immigrants, we use an IV estimation strategy. The instrument is constructed by estimating a bilateral migration model for 24 destination and 208 source countries. We find that the host country responds to the increase in immigrants by adjusting various expenditures, such as by reallocating resources from social welfare to national defense and public order. Our findings imply that (1) immigration affects policy outcomes in areas with a low ethnic or redistributive dimension and (2) immigration may have an insubstantial effect on the total size of government.

     

Is the willingness to take risks contagious? A comparison of immigrants and native-born in the United States

A number of studies have shown that immigrants are more willing to take risks than native-born populations. In this paper, we measure if the willingness to take risks is contagious and if this effect is different for immigrants and native-born individuals in the United States. We suggest that the willingness to take risks may be contagious, like emotions and generosity, i.e. an individual may be more willing to take risks if others make risky decisions. We measure if contagion has a stronger effect on willingness to take risks among immigrants than native populations using a variety of vignettes, specifically in the domains of career, financial investment, and health. Respondents were randomly assigned either to a control or experimental condition. In the experimental condition, we attempted to induce risk-taking by suggesting that other individuals made risky decisions in the lottery-choice tasks (a ‘risk shift condition’). Contrary to expectations, the risk shift condition had a positive effect on willingness to take risks among native-born, while a negative effect or no effect was found among immigrants (conservative shift). Native-born found the situations more beneficial in the risk shift condition than in the control condition, while immigrants found them less beneficial in the risk shift condition. The conservative shift was found among immigrants, as well as males and self-employed. Risk shift condition reduced the sense of power among power-motivated individuals (males and immigrants), which produced a less optimistic evaluation of risky situations. While taking into consideration that others make risky decisions, immigrants and males perceived situations as less beneficial for them. The results of the experiment have some implications for our understanding of the link between a sense of power and the willingness to take risks.     

Assessing the Fiscal Costs and Benefits of A8 Migration to the UK*

This paper assesses the fiscal consequences of migration to the UK from the Central and Eastern European countries that joined the European Union in May 2004 (A8 countries). We show that A8 immigrants who arrived after EU enlargement in 2004 and who have at least one year of residence, and are therefore legally eligible to claim benefits, are 59 per cent less likely than natives to receive state benefits or tax credits and 57 per cent less likely to live in social housing. Furthermore, even if A8 immigrants had the same demographic characteristics as natives, they would still be 13 per cent less likely to receive benefits and 29 per cent less likely to live in social housing. We go on to compare the net fiscal contribution of A8 immigrants with that of individuals born in the UK, and find that in each fiscal year since enlargement in 2004, irrespective of the way that the net fiscal contribution is defined, A8 immigrants made a positive contribution to the public finances despite the fact that the UK has been running a budget deficit over the last few years. This is because they have a higher labour force participation rate, pay proportionately more in indirect taxes and make much less use of benefits and public services.     

The Mental Health Effects of the First Two Months of Lockdown during the COVID-19 Pandemic in the UK*

In this paper, we estimate the effects of the COVID-19 pandemic on mental health in the UK. We use longitudinal micro data for the UK over the period 2009–20 to control for pre-existing trends in mental health and construct individual-specific counterfactual predictions for April 2020, against which the COVID-19 mental health outcomes can be assessed. Our analysis reveals substantial effects at the population level, approximately equal in magnitude to the pre-pandemic differences between the top and bottom quintiles of the income distribution. This overall effect was not distributed equally in the population – the pandemic had much bigger effects for young adults and for women, which are groups that already had lower levels of mental health before COVID-19. Hence inequalities in mental health have been increased by the pandemic. Even larger effects are observed for measures of mental health that capture the number of problems reported or the fraction of the population reporting any frequent or severe problems, which more than doubled. Pre-existing health vulnerabilities had no predictive power for subsequent changes in mental health.     

The ageing of Europe: Demographic scenarios of Europe's futures

This paper explores the demographic futures of Europe by presenting two scenarios. The ‘silver century’ scenario is based on the continuation of current demographic trends and policies. In this scenario, Europe's population will continue to age and immigration will be limited. As a result younger people will increasingly tend to concentrate in urban areas while the retirees, who are able, will settle in suburban and rural spaces. In the ‘open borders’ scenario, the EU and most of the member states will introduce an open and actively promoted immigration policy. Most immigrants will concentrate in large metropolitan areas. At the same time there will also be some countries and regions with very limited immigration from abroad. At the local scale immigration will contribute to social and spatial segregation. Hence, without the regulation or at least management of types and destinations of immigration, demographic imbalances will not be addressed at the regional level. Furthermore while the freedom of movement may have some macro-economic benefits and address population imbalances in some (mainly metropolitan) areas, pre-existent trends undermining both socio-economic cohesion and sustainable patterns of development are unlikely to be resolved.     

经合组织国家医疗融资结构的收敛：经验与启示

摘要：医疗融资是医疗体制中的一个重要组成部分,具有募集资金、分担与降低风险、购买医疗服务等功能。文章基于17个OECD国家1972—2010年间的医疗融资数据,采用公共融资占医疗总融资的比例和人均公共融资作为收敛检验指标,利用盯收敛和p收敛两种判定收敛的方法,结果显示,总样本中这两项指标均发生了收敛现象,收敛的程度随医疗体制类型和时间段的不同而不同,且并非总是单调的。文章的结论虽只是初步的,但深入研究医疗融资结构收敛及其成因和效果,必将对我国医疗体制改革尤其是医疗融资政策设计具有重要意义。     

Quantifying the Impact of Immigration on the Spanish Welfare State

The Spanish population will experience significant aging in coming years. This demographic change will impose a heavy burden on the national budget. In particular, expenditure on pensions and health are expected to rise significantly. The inflow of immigrants could help to alleviate the fiscal burden that future generations will have to bear. In this paper we try to quantify the impact of immigration on the Spanish Welfare State, using the methodology of Generational Accounting. Our results suggest that the impact of immigration will be positive and significant.     

Free Immigration and Welfare Access: The Swedish Experience

With the expansion of the European Union from 15 to 25 member countries in 2004, fears of migrants’ excessive welfare use led 14 of the 15 older member countries to impose restrictions on the access of citizens of the new member countries – the A10 countries – to their welfare systems. Sweden was the only exception. This paper evaluates the net contribution of post‐enlargement A10 immigrants to Swedish public finances in 2007. On average, A10 immigrants generate less public revenue than the population on average, but they also cost less. The net result is a zero or small positive net contribution. In particular, A10 immigrants do not benefit more from basic social welfare than the population on average. The discounted net contribution over the A10 immigrants’ lifetimes may be positive or negative depending, for example, on their income assimilation rates and on future real interest rates.     

Cultural Determinants of Household Saving Behavior

Relying on the epidemiological approach, we show that culture is a significant driver of household saving behavior. Second-generation immigrants from countries that put strong emphasis on thrift or wealth accumulation tend to save more in Germany. We confirm these results in data from the United Kingdom. By linking parents to their children, we show that these two cultural components affect the saving behavior of both first-generation immigrants and their children.     

Recessions and Health: The Long-Term Health Consequences of Responses to the Coronavirus*

The lockdown measures that were implemented in the spring of 2020 to stop the spread of COVID-19 are having a huge impact on economies in the UK and around the world. In addition to the direct impact of COVID-19 on health, the following recession will have an impact on people's health outcomes. This paper reviews economic literature on the longer-run health impacts of business-cycle fluctuations and recessions. Previous studies show that an economic downturn, which affects people through increased unemployment, lower incomes and increased uncertainty, will have significant consequences on people's health outcomes both in the short and longer term. The health effects caused by these adverse macroeconomic conditions will be complex and will differ across generations, regions and socio-economic groups. Groups that are vulnerable to poor health are likely to be hit hardest even if the crisis hit all individuals equally, and we already see that some groups such as young workers and women are worse hit by the recession than others. Government policies during and after the pandemic will play an important role in determining the eventual health consequences.     

Health and Employment amongst Older Workers*

Health and employment are strongly correlated. This paper reviews the existing evidence and brings in new evidence on the following issues: (a) the measurement of health; (b) the impact of health on employment rather than just the association between health and employment; (c) the mechanisms by which health impacts employment; and (d) the likely effect of recent retirement and disability policy changes in the UK. Although the magnitude of the estimated effect of health on employment varies greatly from study to study, some of this variation is driven by the health measure used. Given our preferred measure, the evidence suggests that 5–10 per cent of the employment decline between ages 50 and 70 is due to declining health in England, with the largest effects among low-educated men. Most of the effect comes through declining preferences for work and lower productivity when in bad health, although some of the effect is from government-provided incentives to not work when in bad health, such as from disability benefits.     

Assessing Benefits from Department of Health and National Health Service Research & Development

Public services in the UK are increasingly expected to account for their outputs and performance. This article describes a retrospective evaluation of the benefits from the R&D funded by a regional office of the NHS Executive. The methods adopted enabled the various elements of the region's R&D portfolio to be examined and provided a basis for the development of a plan for regular monitoring. The proposals for implementation are now also feeding into a debate as to how health services R&D might best be monitored nationally in a way that is compatible with the norms and practices of research in other contexts.     

Taxation, Migration, and Pollution

This paper analyzes optimal fiscal, environmental and immigration policy for a single jurisdiction. In the presence of immigration quotas, taxes on the output of externality-producing industries should be higher than indicated by the standard rule for Pigovian corrective taxation. Immigration quotas are not optimal if fiscal instruments can be used to control immigration, and relaxation of immigration quotas generally increases domestic welfare. If optimal taxes are imposed on immigrants, no immigration quota should be imposed, and a version of the traditional Pigovian rule characterizes optimal taxation of domestic externalities. If production in the immigrants' country of origin causes trans-boundary spillovers, domestic welfare can be improved by lighter taxation of immigrants or by further relaxation of immigration quotas. This revised version was published online in July 2006 with corrections to the Cover Date.     

On the Asymmetric Recognition of Good and Bad News in France, Germany and the United Kingdom

We investigate whether accounting systems recognise bad news more promptly in earnings than good news, where news is proxied by changes in share price. The analysis is based on a sample of firm/years drawn from France, Germany, and the UK during 1990 to 1998. These three countries are the originators of three distinct legal traditions. Previous studies have argued that asymmetric recognition, one manifestation of conservative accounting, is sensitive to legal background and history. We find that in all three countries the contemporaneous association between earnings and returns is much stronger for bad news (i.e. when price changes are negative) than for good news, and although the results are strongest for the UK, and then France, the inter-country differences are not statistically significant. The stronger reaction to bad news is more pronounced for firms with relatively low capitalisation. We also find that the relative persistence of profits and losses are consistent with asymmetric recognition in France and the UK, but not in Germany, and that the more timely recognition of bad news is maintained even when we control for earnings persistence. When we extend the model to include price changes from previous periods, we see that the stronger reaction to bad news decays over time. The results from this model also suggest that 'pervasive' conservatism, unrelated to news, is observed in Germany and France, but the UK results are consistent with optimism. Although asymmetric recognition is generally strongest in the UK and weakest in Germany, and this broadly conforms to our expectations, the differences are less clear than the results from earlier periods.     

Weak Links in the Chain: A Diagnosis of Health Policy in Poor Countries

Recent empirical and theoretical literature sheds light on thedisappointing experience with implementation of primary healthcare programs in developing countries. This article focuseson the evidence showing two weak links in the chain betweengovernment spending for services to improve health and actualimprovements in health status. First, institutional capacityis a vital ingredient in providing effective services. Whenthis capacity is inadequate, health spending, even on the rightservices, may lead to little actual provision of services. Second,the net effect of government health services depends on theseverity of market failures—the more severe the marketfailures, the greater the potential for government servicesto have an impact. Evidence suggests that market failures arethe least severe for relatively inexpensive curative services,which often absorb the bulk of primary health care budgets.A companion paper, available from the authors (seep. 219), offersa perspective on how government funds can best be used to improvehealth and well-being in developing countries. It gives an alternativeview of appropriate public health policy, one that focuses onmitigating the characteristic market failures of the sectorand tailoring public health activities to the government's abilityto deliver various services.      

Immigration and local spending in social services: evidence from a massive immigration wave

The aim of this paper is to analyze the relationship between immigration and redistributive public spending by using the recent, massive arrival of immigrants in Spain. Specifically, we focus our analysis on the effect of 1998–2006 changes in local immigrant density on contemporaneous changes in municipal spending in social services. To address the potential endogenous location of immigrants, we adopt an instrumental variables approach that uses the distribution of rental housing in 1991 to predict the location of immigrant inflows. The results indicate that (per capita) social spending increased less in those municipalities that recorded the largest increases in immigrant density. We interpret our results as a reduction in natives’ demand for redistributive public spending.     

论人人享有基本卫生保健之改革

本文通过分析"看病贵、看病难"原因而导致的阻碍人人享有初级卫生保健的主要因素,提出必须深化卫生体制改革,发展基层社区卫生服务、建立覆盖全民的基本医疗保障制度以及实行均等化的公共卫生服务和基本药物制度,以实现人人享有初级卫生保健的目标。     

On the Political Economy of Low Skilled Immigration and the Welfare State

This paper inquires into the collective decision making on both unemployment insurance and immigration. It is shown that low skill immigration typically increases the contribution rate to the unemployment insurance system. This can translate into higher benefits, the increase of the economy-wide unemployment rate nonwithstanding. The host country allows for immigration only if high skilled natives are sufficiently powerful. Furthermore, political rights of immigrants are restricted to a minimum.