CAN GUEST WORKERS SOLVE JAPAN'S FISCAL PROBLEMS?

Selahattin İmrohoroğlu, Sagiri Kitao, Tomoaki Yamada

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

The labor force in Japan is projected to fall from 64 million in 2014 to 20 million in 2100, signaling unprecedented tax/transfer adjustments to achieve fiscal sustainability. In this paper, we develop a quantitative overlapping generations model to measure the impact of guest worker programs in Japan. Against a baseline general equilibrium transition in which the consumption tax adjusts to achieve fiscal sustainability, we compute alternative transitions with guest worker programs. Depending on the size and skill distribution of guest workers, these programs may mitigate Japan's fiscal imbalance problem with a relatively manageable increase in the consumption tax. (JEL E2, E6, H5, J11, J15).

Original languageEnglish
Pages (from-to)1287-1307
Number of pages21
JournalEconomic Inquiry
Volume55
Issue number3
DOIs
Publication statusPublished - 2017 Jul

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics

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