The paper shows that immigration can create an incentive for deficit-spending among natives. If immigrants use up some given share of public funds net of debt service, a policy of running budget deficits becomes optimal. The optimal budget deficits are higher, the higher the share of net public...

In this paper, we employ generational accounting to analyse the inter-temporal stance of Austrian public finance in 1998 as well as the inter-temporal fiscal impact of immigration to Austria. Immigrants affect inter-temporal fiscal balance in essentially two ways. Firstly, they have a...

This paper examines the effect of immigration on the level of income redistribution via majority voting on the income tax. As a main result, we derive multiple tax equilibria if immigrants are allowed to vote and the skill composition of natives is not too homogeneous. In this case, the outcome...

Sectoral labor supply shortage is a cause of concern in many OECD countries and has raised support for immigration as a potential remedy. In this paper, we derive a general equilibrium model with overlapping generations, where natives require a compensating wage differential for working in one...