The Department of Business and Management Science invites you to a brownbag seminar with Valerio Dotti, Ca' Foscari University of Venice.
We investigate the effects of population ageing on immigration policies using a citizen-candidate model of elections. In each period, young people work and pay taxes while old people receive social security payments. Immigrants are all young, meaning they contribute significantly to financing the cost of public services and social security. Among natives, the elderly and the poor benefit the most from public spending. However, since these two types of voters do not internalise the positive fiscal effects of immigration, they have a common interest in supporting candidates who seek to curb immigration and increase the tax burden on high-income individuals.
Population ageing increases the size and, in turn, the political power of such sociodemographic groups, resulting in more restrictive immigration policies, a larger public sector, higher tax rates, and lower societal well-being. Calibrating the model to UK data suggests that the magnitude of these effects is large. The implications of this model are shown to be consistent with the patterns observed in UK attitudinal data.