Global Aging and Fiscal Policy with InternationalLabor Mobility: A Political Economy Perspective

This paper uses an overlapping generations model with international labor mobility and apolitically responsive fiscal policy to examine aging in developed and developing regions.Migrant workers change the political structure composed of young and elderly voters in bothlabor-receiving and labor-sending countries. Numerical simulations show that the developedregion benefits more from international labor mobility through the contribution of migrantworkers as laborers, savers, and voters. The developing region experiences significantgrowth in all specifications but benefit more under international capital mobility. Restrictingpolitical participation of migrant workers in the developed region produces inferior growthresults....