Public Finance in an Era of Global Demographic Change: Fertility
Busts, Migration Booms, and Public Policy
by
David E. Wildasin Martin School of Public Policy and Department of Economics University of Kentucky Lexington, KY 40506-0027 USA
Abstract
The rich countries of the world, especially those of Western Europe,
are aging rapidly due to fertility rates far below the replacement
rate, while experiencing substantial immigration from elsewhere in
Europe, North Africa, and the third world generally. For the
foreseeable future, West European countries will confront a policy
tradeoff between population aging and (im)migration. The literature
shows that both skilled and unskilled workers affect the highly
redistributive fiscal systems of the advanced economies, the first as
net contributors, the second as net beneficiaries. Age-imbalanced
population structures in rich countries and global competition for
labor create incentives to limit the extent of redistribution in rich
countries.
