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Migration, Social Standards and Replacement Incomes. How to Protect Low-income Workers in the Industrialized Countries against the Forces of Globalization and Market Integration

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Author Info
Hans-Werner Sinn ()

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Abstract

This paper discusses how an industrialized country could defend the wages and social benefits of its unskilled workers against wage competition from immigrants. It shows that fixing social standards harms the workers and that fixing social replacement incomes implies migration into unemployment. Defending wages with replacement incomes brings about first-order efficiency losses that outweigh the budget cost to the government. By contrast, wage subsidies involve much smaller welfare losses. While the exclusion of migrants from a national replacement program does not improve the situation, the (temporary) exclusion of migrants from a national subsidy program makes it possible to avoid a distortion of the migration pattern.

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Publisher Info
Paper provided by CESifo GmbH in its series CESifo Working Paper Series with number CESifo Working Paper No. 1265.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1265

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Related research
Keywords: migration unemployment welfare

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Find related papers by JEL classification:
F15 - International Economics - - Trade - - - Economic Integration
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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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. Sinn, Hans-Werner & Ochel, Wolfgang, 2003. "Social Union, Convergence and Migration," Discussion Papers in Economics 948, University of Munich, Department of Economics. [Downloadable!]
  3. Wildasin, David E, 1991. "Income Redistribution in a Common Labor Market," American Economic Review, American Economic Association, vol. 81(4), pages 757-74, September. [Downloadable!] (restricted)
  4. Sinn, Hans-Werner, 1990. "Tax harmonization and tax competition in Europe," European Economic Review, Elsevier, vol. 34(2-3), pages 489-504, May. [Downloadable!] (restricted)
    Other versions:
  5. Richter, Wolfram F., 2004. "Delaying integration of immigrant labor for the purpose of taxation," Journal of Urban Economics, Elsevier, vol. 55(3), pages 597-613, May. [Downloadable!] (restricted)
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  6. Hans-Werner Sinn & Wolfgang Ochel, 2003. "Social Union, Convergence and Migration," Journal of Common Market Studies, Blackwell Publishing, vol. 41(5), pages 869-896, December. [Downloadable!] (restricted)
  7. Sinn, Hans-Werner, 2002. "EU Enlargement and the Future of the Welfare State," Scottish Journal of Political Economy, Scottish Economic Society, vol. 49(1), pages 104-15, February. [Downloadable!] (restricted)
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  8. Cremer, Helmuth & Pestieau, Pierre, 1996. "Distributive implications of European integration," European Economic Review, Elsevier, vol. 40(3-5), pages 747-757, April. [Downloadable!] (restricted)
  9. Hans-Werner Sinn & Wolfgang Ochel, 2003. "Social Union, Convergence and Migration," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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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. Fidrmuc, Jan, 2005. "Labour Mobility During Transition: Evidence from the Czech Republic," CEPR Discussion Papers 5069, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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