Arbeitspapier

Optimal budget deficits and immigration

The paper shows that immigration can create an incentive for deficit-spending among natives. If immigrants use up some given share of public funds net of debt service, a policy of running budget deficits becomes optimal. The optimal budget deficits are higher, the higher the share of net public funds spent exogenously on immigrants. We take the share of immigrants in the total population as a proxy for exogenous spending on immigrants and estimate its effect on budget deficits for 20 OECD countries during 1980 - 1995. We find the effect to be significant and positive, suggesting that exogenous spending was increasing during that time.

Sprache
Englisch

Erschienen in
Series: Working Paper ; No. 0619

Klassifikation
Wirtschaft
National Deficit; Surplus
National Debt; Debt Management; Sovereign Debt
International Migration
Thema
optimal budget deficits
immigration
tax-smoothing

Ereignis
Geistige Schöpfung
(wer)
Mayr, Karin
Ereignis
Veröffentlichung
(wer)
Johannes Kepler University of Linz, Department of Economics
(wo)
Linz
(wann)
2006

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Mayr, Karin
  • Johannes Kepler University of Linz, Department of Economics

Entstanden

  • 2006

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