Welfare Migration: Is the Net Fiscal Burden a Good Measure of its Economics Impact on the Welfare of the Native-Born Population?
AbstractMigration 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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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1273.
Date of creation: 2004
Date of revision:
migration; welfare state; fiscal burden;
Other versions of this item:
- Assaf Razin & Efraim Sadka, 2004. "Welfare Migration: Is the Net Fiscal Burden a Good Measure of Its Economic Impact on the Welfare of the Native Born Population?," NBER Working Papers 10682, National Bureau of Economic Research, Inc.
- H00 - Public Economics - - General - - - General
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