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Welfare Migration: Is the Net Fiscal Burden a Good Measure of its Economics Impact on the Welfare of the Native-Born Population?

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Author Info
Assaf Razin ()
Efraim Sadka ()

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Abstract

Migration of young workers (as distinct from retirees), even when driven in by the generosity of the welfare state, slows down the trend of increasing dependency ratio. But, even though low-skill migration improves the dependency ratio, it nevertheless burdens the welfare state. Recent studies by Smith and Edmonston (1977), and Sinn et al (2003) comprehensively estimate the fiscal burden that low-skill migration imposes on the fiscal system. However, an important message of this paper is that in an infinite-horizon set-up, one cannot fully grasp the implications of migration for the welfare state just by looking at the net fiscal burden that migrants impose on the fiscal system. In an infinite-horizon, overlapping generations economy, this net burden could change to net gain to the native-born population.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1273.

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Date of creation: 2004
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Handle: RePEc:ces:ceswps:_1273

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Related research
Keywords: migration; welfare state; fiscal burden;

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Find related papers by JEL classification:
H00 - Public Economics - - General - - - General

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. Razin, Assaf & Sadka, Efraim, 2000. " Unskilled Migration: A Burden or a Boon for the Welfare State?," Scandinavian Journal of Economics, Blackwell Publishing, vol. 102(3), pages 463-79, June. [Downloadable!] (restricted)
    Other versions:
  2. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies. [Downloadable!]
    Other versions:
  3. Hans-Werner Sinn, 2004. "EU Enlargement, Migration and the New Constitution," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  4. Razin, Assaf & Sadka, Efraim, 1995. "Resisting Migration: Wage Rigidity and Income Distribution," CEPR Discussion Papers 1091, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  5. Alan J. Auerbach & Philip Oreopoulos, 1999. "Analyzing the Fiscal Impact of U.S. Immigration," American Economic Review, American Economic Association, vol. 89(2), pages 176-180, May. [Downloadable!] (restricted)
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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. Panos Hatzipanayotou & Michael S. Michael, 2005. "Migration, Tied Foreign Aid and the Welfare State," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  2. Alexander Hijzen & Peter Wright, 2005. "Migration, Trade and Wages," Working Papers 2005-06, CEPII research center. [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. Michael S. Michael, 2006. "Are Migration Policies that Induce Skilled (Unskilled) Migration Beneficial (Harmful) for the Host Country?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  5. Gordon H. Hanson, 2006. "Illegal Migration from Mexico to the United States," NBER Working Papers 12141, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. 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)
    Other versions:
  7. Paolo E Giordani & Michele Ruta, 2008. "Prejudice and Immigration," Levine's Bibliography 122247000000002276, UCLA Department of Economics. [Downloadable!]
  8. 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)
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This page was last updated on 2009-11-3.


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