Is International Labour Mobility a Threat to the Welfare State? Evidence from Finland in the 1990s

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Is International Labour Mobility a Threat to the Welfare State? Evidence from Finland in the 1990s

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Jukka Pirttilä (Bank of Finland, Finland)

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Jukka Pirttilä

Abstract

This paper assesses the factors behind Finnish emigration and return migration in the 1990s. Logit-analysis using combined micro data from the labour force survey and emigration statistics in 1990–1999 reveals that, when controlling for other background characteristics, highly educated individuals are 5 times more prone to emigrate than individuals with secondary education only. There is no similar difference in the return migration propensities within individuals of different educational levels. Panel-data analysis based on country-level data on the migration destination countries of the (even highly educated) Finnish emigrants in 1990–2000 reveals, however, that migration has not been directed towards countries with low tax rates. These findings therefore suggest that while there is some evidence that the Finnish welfare state may suffer from the selection of emigration incidence on highly educated workforce, emigration has mainly been determined by other factors than potential tax competition on mobile labour.

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Article provided by Finnish Economic Association in its journal Finnish Economic Papers.

Volume (Year): 17 (2004)
Issue (Month): 1 (Spring)
Pages: 18-34
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Handle: RePEc:fep:journl:v:17:y:2004:i:1:p:18-34

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Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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.:

Cremer, Helmuth & et al, 1996. "Mobility and Redistribution: A Survey," Public Finance = Finances publiques, , vol. 51(3), pages 325-52.
George J. Borjas & Bernt Bratsberg, 1994. "Who Leaves? The Outmigration of the Foreign-Born," NBER Working Papers 4913, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Borjas, George J & Bratsberg, Bernt, 1996. "Who Leaves? The Outmigration of the Foreign-Born," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 165-76, February. [Downloadable!] (restricted)
Alberta Charney, 1993. "Migration and the Public Sector: A Survey," Regional Studies, Taylor and Francis Journals, vol. 27(4), pages 313-326, January. [Downloadable!] (restricted)
Ruud de Mooij & Sjef Ederveen, . "Taxation and foreign direct investment: A synthesis of empirical research," CPB Discussion Papers 3, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
Other versions:
- de Mooij, Ruud A. & Ederveen, Sjef, 2001. "Taxation and Foreign Direct Investment: A Synthesis of Empirical Research," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
- de Mooij, Ruud A & Ederveen, Sjef, 2003. "Taxation and Foreign Direct Investment: A Synthesis of Empirical Research," International Tax and Public Finance, Springer, vol. 10(6), pages 673-93, November. [Downloadable!] (restricted)
- Ruud de Mooij & Sjef Ederveen, 2003. "Taxation and Foreign Direct Investment: A Synthesis of Empirical Research," Asia-Pacific Financial Markets, Springer, vol. 10(6), pages 673-693, November. [Downloadable!] (restricted)
Rosanne Altshuler & Timothy J. Goodspeed, 2002. "Follow the Leader? Evidence on European and U.S. Tax Competition," Departmental Working Papers 200226, Rutgers University, Department of Economics.

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