This paper investigates the effect of labor immigration on public pensions when wage setting by a centralized trade union leads to unemployment. It is shown that immigration improves the financial soundness of pay-as-you-go pensions if and only if it diminishes total employment. This occurs if the absolute value of the elasticity of labor demand exceeds the unemployment rate.
Additional information:
Scan fehlt die Titelblatt-Seite des Originals, darin lautet der Titel wie folgt: "Can immigration alleviate the demographic burden?"
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