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ESTIMATING THE IMPACT OF IMMIGRANTS ON THE HOST COUNTRY SOCIAL SECURITY SYSTEM WHEN RETURN MIGRATION IS AN ENDOGENOUS CHOICE

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2012-05-01
Kırdar, Murat Güray
This article estimates immigrants fiscal impact on the German pension insurance and unemployment insurance systems when return migration is an endogenous choice. For this purpose, it develops a dynamic stochastic model of joint return migration and saving decisions and estimates it using longitudinal data on immigrants from five countries. The results indicate that exogenous return migrationwhich has been the practice of the literature so farunderestimates the state coffers net gain substantially; e.g., the unemployment insurance systems net gain from Turks arriving after age 30 falls by an amount that is roughly equal to their annual earnings at arrival.