Effects of Legal and Unauthorized Immigration on the U.S. Social Security System

Abstract

Immigration is having an increasingly important eect on the social insurance sys- on the domestic economy. Moreover, a signicant percentage of immigrants migrate back to their countries of origin after a relatively short period of time, and their savings while in the US are predominantly in the form of remit- tances. Therefore, any analysis that tries to understand the impact of immigrant workers on the overall system has to take into account the decisions and events these individuals face throughout their lives, as well as the use of the government programs they are entitled to. We propose a life-cycle OLG model in a General Equilibrium framework of legal and undocumented immigrants' decisions regarding consumption, savings, labor supply and program participation to analyze their role in the