Immigration and the public sector: Income effects for the native population in Sweden

The immigrants' age structure and labour market situation are major determinants for their net contribution to the public sector. During the 50s, 60s and the 70s the immigrants' net contributions gave positive income effects for the native Swedes. Nowadays there are negative income effects due to the deteriorating employment situation among the immigrants. The yearly positive or negative income effects have at most been 1–2% of the gross national product. A change in the immigrants' employment rate by 1 percentage unit will change their yearly net contribution to the public sector by 0.1% of the gross national product. Received: 2 February 1996/Accepted: 28 July 1998