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A simulation analysis of the longer-term effects of immigration on per capita income in an aging population

about accompanying immigration are a 20 percent quota and a (25, 50, 25) age distribution.
The results of the experiments are presented in Table 7. The top panel in the table repeats
results from Tables 1 and 2: constant mortality rates are assumed, with and without immi-
gration. The middle panel assumes declining mortality and the bottom one declining mor-
tality plus increased participation rates, with and without immigration in both cases.
The most prominent effect of declining mortality, taken alone, is to increase the propor-
tion of older dependents in the population, decrease the labour force/population ratio, and
lower both measures of income per capita. Immigration operates in the opposite direction,
and much more strongly. Introducing increased participation of seniors in the bottom panel
of the table offsets the increased dependency effect of lower death rates and has a net posi-
tive effect on income per capita, but immigration is again the dominant contributor. In
short, declining mortality lowers per capita income, declining mortality plus increasing
Seniors’ participation rates by half raises it, but while the net effect is significant it takes
second place to the effect of immigration.

Table 7. Simulations with and without immigration, allowing for declining mortality rates and increased labour force participation of Seniors
No immigration Immigration, q = 20%
t = 0 t = 1 t = 2 t = 3 t = 1 t = 2 t = 3
--------------------------------------------------------------- constant mortality ---------------------------------------------------------------
Population 100.0 104.5 98.0 87.1 125.4 151.1 177.4
- growth rate — 4.5 –6.2 –11.1 25.4 20.5 17.4
- proportion old 16.8 26.6 31.5 31.9 22.2 23.3 24.1
- proportion child 25.7 21.9 20.2 20.3 22.4 22.8 22.1
LF/Pop. ratio 48.1 44.5 42.2 41.7 47.1 45.9 45.9
National income 100.0 96.8 86.1 75.6 122.8 144.3 169.4
- per capita 100.0 92.6 87.9 86.8 98.0 95.5 95.5
- wtd. per capita 100.0 90.7 85.2 84.2 96.2 93.9 93.6
--------------------------------------------------------------- declining mortality ---------------------------------------------------------------
Population 100.0 106.5 103.3 94.7 127.8 158.8 192.6
- growth rate — 6.5 –3.0 –8.4 27.8 24.2 21.3
- proportion old 16.8 27.6 34.3 36.3 23.0 25.3 27.0
- proportion child 25.7 21.5 19.3 18.8 22.1 22.0 21.1
LF/Pop. ratio 48.1 44.1 40.9 39.5 46.7 45.0 44.5
National income 100.0 97.7 87.8 77.8 124.3 148.6 178.3
- per capita 100.0 91.7 85.0 82.2 97.2 93.6 92.6
- wtd. per capita 100.0 89.6 82.0 79.1 95.3 91.7 90.2
------------------------------------------------------ declining mortality, increased LFP ------------------------------------------------------
Population 100.0 106.5 103.3 94.7 127.8 158.8 192.6
- growth rate — 6.5 –3.0 –8.4 27.8 24.2 21.3
- proportion old 16.8 27.6 34.3 36.3 23.0 25.3 27.0
- proportion child 25.7 21.5 19.3 18.8 22.1 22.0 21.1
LF/Pop. ratio 48.1 45.8 42.7 41.3 48.1 46.4 46.0
National income 100.0 101.4 91.7 81.4 128.0 153.2 184.2
- per capita 100.0 95.2 88.8 86.0 100.1 96.5 95.6
- wtd. per capita 100.0 93.0 85.6 82.7 98.1 94.5 93.2
Note: See relevant parts of note to Table 1. AGEIM is (25, 50, 25) when there is immigration. Declines in mortality are at the average group-specific percentage
rates of decrease per generation over the previous three-generation time span. Increased LFP means Seniors’ labour force participation rates are increased by half
(from 20% to 30% for men, 10% to 15% for women).

International Journal of Population Studies | 2015, Volume 1, Issue 1 88