Immigration as a policy instrument for an economy with an aging population

The instruments q and α are thus the two available to the government in implementing an immigration policy to offset the effects of population aging on the economy. [...] We calibrate the model in the next section and run a series of simulations in the ones following, resulting in a set of tables that explore the effects of immigration and related issues. [...] The problem in prospect for the people of Alpha is the result of a distortion of the distribution brought about by the boom/bust sequence of fertility rates in previous generations, and the consequent imminent decline in the proportion of people of working age. [...] The aim of Alphan immigration policy is then to shift the distribution in a different direction by increasing the proportion of working age and decreasing the proportion in the dependency age groups. [...] The point is that to be interpreted realistically, the productivity growth rate should be defined as the difference from the growth rate in the rest of the world, or from the neighbouring country of Beta, perhaps, depending on what is the relevant standard of comparison in Alpha.