We develop an overlapping-generations model that highlights the interaction between an unfunded pension program and an unemployment insurance program in the presence of a labor market with union wage-setting. Both programs are financed by earmarked proportional wage taxes levied on firms and...

Immigration has been popularised in the economics literature as a tool to balance the troubled PAYG pension systems. A pivotal research by Razin and Sadka showed that unskilled immigration can surmount the pension problem and, further, boost the general welfare in the host economy. However a...