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Unskilled Migration: A Burden or a Boon for the Welfare State?

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Author Info
Razin, Assaf
Sadka, Efraim

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Abstract

As relatively low earners, migrants are net beneficiaries of the welfare state. Therefore, in a static setup, migration may be resisted by the entire native-born population. However, it is shown that in a dynamic setup with a pension system, which is an important pillar of any welfare state, migration is beneficial to all income (high and low) and all age (old and young) groups, when the economy has good access to international capital markets. The pro-migration feature of the dynamic model is weakened and possibly overturned when the economy does not have good access to such markets. In this case, to the extent that factor prices are significantly affected by migration because of low substitution between labour and capital, low-skill native born and possibly also high-skill native born may lose. Copyright 2000 by The editors of the Scandinavian Journal of Economics.

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Article provided by Blackwell Publishing in its journal Scandinavian Journal of Economics.

Volume (Year): 102 (2000)
Issue (Month): 3 (June)
Pages: 463-79
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Handle: RePEc:bla:scandj:v:102:y:2000:i:3:p:463-79

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. David E. Wildasin, 1994. "Income Redistribution and Migration," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 637-56, August. [Downloadable!] (restricted)
    Other versions:
  2. Peter S. Heller, 1998. "Rethinking Public Pension Reform Initiatives," IMF Working Papers 98/61, International Monetary Fund.
  3. Razin, Assaf & Sadka, Efraim, 1995. "Resisting Migration: Wage Rigidity and Income Distribution," American Economic Review, American Economic Association, vol. 85(2), pages 312-16, May. [Downloadable!] (restricted)
    Other versions:
  4. George J. Borjas & Stephen J. Trejo, 1991. "Immigrant Participation in the Welfare System," NBER Working Papers 3423, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Richard Hemming, 1998. "Should Public Pensions be Funded?," IMF Working Papers 98/35, International Monetary Fund.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Karin Mayr, 2003. "Immigration and Majority Voting on Income Redistriubtion-Is there a Case for Opposition from Natives?," Economics working papers 2003-08, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
  2. Clinton Lively, 2001. "Merrill Lynch & Co.: process risk management program," Conference Series ; [Proceedings], Federal Reserve Bank of Boston. [Downloadable!]
  3. Edith Sand & Assaf Razin, 2006. "Immigration and the Survival of Social Security: A Political Economy Model," NBER Working Papers 12800, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Assaf Razin & Efraim Sadka, 2004. "Welfare Migration: Is the Net Fiscal Burden a Good Measure of its Economics Impact on the Welfare of the Native-Born Population?," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  5. Tim Krieger, 2002. "Immigration, Public Pensions, and Heterogenous Voters," Departmental Discussion Papers 112, University of Goettingen, Department of Economics. [Downloadable!]
  6. de Melo, Jaime & Grether, Jean-Marie & Müller, Tobias, 2001. "The Political Economy of International Migration in a Ricardo-Viner Model," CEPR Discussion Papers 2714, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Mika Haapanen, 2001. "Labour market performance and determinants of migration by gender and region of origin," ERSA conference papers ersa01p130, European Regional Science Association. [Downloadable!]
  8. Razin, Assaf & Sand, Edith, 2007. "The Role of Immigration in Sustaining the Social Security System: A Political Economy Approach," CEPR Discussion Papers 6302, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  9. Tim Krieger, 2001. "Intergenerational Redistribution and Labor Mobility: A Survey," Departmental Discussion Papers 106, University of Goettingen, Department of Economics. [Downloadable!]
    Other versions:
  10. Edith Sand & Assaf Razin, 2007. "The Political-Economy Positive Role of the Social Security System in Sustaining Immigration (But Not Vice Versa)," NBER Working Papers 13598, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  11. Tim Krieger, 2004. "Public pensions and immigration policy when voters are differently skilled," Public Economics 0411006, EconWPA. [Downloadable!]
  12. Alexander Kemnitz, 2005. "Can Immigrant Employment Alleviate the Demographic Burden? The Role of Union Centralization," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  13. Gemma Larramona & Jesus Clemente & Pedro Garcia-Castrillo, 2004. "Illegal immigration and a heterogeneous labour force. When can quotas generate an internal conflict?," ERSA conference papers ersa04p125, European Regional Science Association. [Downloadable!]
  14. Kari E. Alho, 2002. "Labour Markets and Immigration Connected to Enlargement," Discussion Papers 791, The Research Institute of the Finnish Economy. [Downloadable!]
  15. Jane Sneddon Little & Robert K. Triest, 2001. "The impact of demographic change on U. S. labor markets," Conference Series ; [Proceedings], Federal Reserve Bank of Boston. [Downloadable!]
    Other versions:
  16. Alexander Kemnitz, . "Unemployment, Technology and the Welfare Effects of Immigration," IVS discussion paper series 611, Institut für Volkswirtschaft und Statistik (IVS), University of Mannheim. [Downloadable!]
  17. Victoria Chorny, & Rob Euwals & Kees Folmer, 2007. "Immigration Policy and Welfare State Design," CPB Documents 153, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  18. Jörg Lingens, 2003. "Unionisation, Growth and Endogenous Skill-Formation," Discussion Papers in Economics 45/03, University of Kassel, Institute of Economics. [Downloadable!]
  19. Tamura, Yuji, 2004. "Referendum-Led Immigration Policy In The Welfare State," The Warwick Economics Research Paper Series (TWERPS) 713, University of Warwick, Department of Economics. [Downloadable!]
  20. Willi Leibfritz & Paul O'Brien & Jean-Christophe Dumont, 2003. "Effects of Immigration on Labour Markets and Government Budgets -- An Overview," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  21. Drinkwater, Stephen & Blackaby, David, 2004. "Migration and Labour Market Differences: The Case of Wales," IZA Discussion Papers 1275, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  22. Edith Sand & Assaf Razin, 2007. "The Role of Immigration in Sustaining the Social Security System: A Political Economy Approach," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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