Immigration and Pension Benefits in the Host Country

This paper examines the role that low-skilled immigration plays in determining pension benefits of the host population. With an overlapping-generations model which allows identifying which groups of native population are in favour or against immigration, we find that despite immigrants having low average productivity, an open borders policy would be implemented since most of current domestic cohorts gain from immigration. Only younger workers might be against immigration since they will coincide with immigrants in their retirement periods. Moreover, we show how a larger immigrant quota would increase the probability of a Pareto improvement for the current domestic population.