Elderly population against immigrants: hurtful paradox in ageing countries

In ageing societies, due to a sort of intergenerational paradox, the elderly tend to support strict immigration policies with their votes despite benefiting from tax-funded services and pensions that are sustained by young workers' contributions. Valerio Dotti, associate professor in Political Economics at Ca' Foscari University of Venice, sheds light on this paradox in a study published in the prestigious Journal of Public Economics.

Dotti developed a model of voting preferences that shows how citizens influence, via the candidates they elect, both migration policy (how many immigrants to bring in) and tax policy (taxes and public spending). This model aims to explain two inconsistencies that emerge in studies dealing with migration.

Many surveys have shown that in countries like the United Kingdom and Italy, citizens are deeply worried about the financial impact of immigration, despite substantial evidence indicating that, on average, it has positive effects. Essentially, they see it as a burden when, in reality, it contributes to the public finances.

Secondly, elderly and low-income citizens, who benefit the most from the fiscal surplus generated by immigration, paradoxically show the highest aversion to immigration. In the UK, for example, the data shows that aversion to immigration increases by one percentage point with every year of respondents' age.

“The explanation for these paradoxes,” says Dotti, “seems to lie in the fact that the fiscal benefits brought by immigration tend to be enjoyed mainly by the wealthier classes, penalising elderly or low-income ‘native’ voters.”

As life expectancy increases and the birth rate falls, therefore, the proportion of voters with anti-immigration preferences increases. This leads to support for more restrictive immigration policies. These policies, in turn, contribute to an ageing population and further worsen the country's fiscal situation, as part of the fiscal surplus due to immigration is lost.

"It is often debated whether favouring immigration or increasing the birth rate is the better policy option. However, in reality, both policies should be seen as complementary rather than alternative. Implementing both policies is crucial for ensuring the long-term sustainability of the system, particularly for the benefit of pensioners and low-income individuals," explains Dotti.

"In ageing countries like ours, we need more automatic adjustment mechanisms for public spending. For example, pensions could be modulated based on the percentage of pensioners in relation to the working population. We also need greater awareness of the value of immigration for public accounts, and more long-term policies that look beyond the short term," the researcher concludes.