Sustaining Fiscal Policy Through Immigration

Posted: 18 Apr 2000

See all articles by Kjetil Storesletten

Kjetil Storesletten

University of Oslo - Department of Economics; Centre for Economic Policy Research (CEPR)


Using a calibrated general equilibrium overlapping generations model, which explicitly accounts for differences between immigrants and natives, this paper investigates whether a reform of immigration policies alone could resolve the fiscal problems associated with the aging of the baby boom generation. Such policies are found to exist and are characterized by an increased inflow of working-age high- and medium-skilled immigrants. One particular feasible policy involves admitting 1.6 million 40-44-year-old high-skilled immigrants annually. These findings are illustrated by computing the discounted government gain of admitting additional immigrants, conditional on their age and skills.

JEL Classification: H39, J61

Suggested Citation

Storesletten, Kjetil, Sustaining Fiscal Policy Through Immigration. Journal of Political Economy, Vol. 108, Issue 2, April 2000, Available at SSRN:

Kjetil Storesletten (Contact Author)

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
+47 2284 4009 (Phone)
+47 2285 5035 (Fax)


Centre for Economic Policy Research (CEPR)

United Kingdom

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