Fiscal opportunities and risks of migration in the context of demographic change - Foundation Office Japan / Regional Economic Programme Asia (SOPAS)
The German welfare state is facing enormous challenges due to demographic change. In the past decades, much was heard about the fiscal burden of demographic change, but comparatively little was seen. In the meantime, in addition to a greater burden on the social security systems, a shortage of labour and skilled labour is also becoming apparent. In addition to the discussion about how domestic potential for the labour market can be raised, there is also discussion about the extent to which migration can contribute to mitigating or even overcoming the negative effects of demographic change on the welfare state. Managed labour migration in particular could be suitable for this purpose.
This study examines this using the method of generational accounting. The study calculates the fiscal effect on the welfare state of future managed, skilled labour migration in various future scenarios. Each of the calculated scenarios always includes a relevant share of unmanaged migration. The results clearly show that controlled, skilled immigration to Germany has a positive fiscal effect on the welfare state. However, it also becomes clear that this positive effect - taking into account a feasible scale of immigration - is not large enough to overcome the lack of sustainability of the German welfare state. It is also precisely this lack of fiscal sustainability that significantly influences the calculated results of the future scenarios. Thus, the authors write: "Should future social policy have been steered back into sustainable dimensions, however, the question of the fiscal dividend of migration arises anew and could then also lead to different conclusions."