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Immigration Policy and Welfare State Design

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Author Info
Victoria Chorny,
Rob Euwals ()
Kees Folmer ()
Abstract

For the design of an immigration policy, in terms of the number and skills of the entrants and their effect on the host country, it is important to realize that the kind of welfare state matters. This study confronts three possible labour migration regimes - a temporary, an open and a selective regime - with two possible welfare state settings - a highly redistributive and a hardly redistributive welfare state. By comparing the likely outcomes between the different regimes, and by taking possible effects on the self-selection of immigrants into account, the study draws the following conclusions. First, both labour migration policy and the welfare state matter for the skill composition of labour migrants. Second, to be attractive for high-skilled labour migrants a highly distributive welfare state needs to undo its discouraging effect on these migrants. Third, a highly redistributive welfare state is attractive for low-skilled labour migrants. Because these migrants may become costly for such a welfare state once they manage to stay permanently, one should be careful with the introduction of temporary migration policies for the low-skilled.

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Paper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Documents with number 153.

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Date of creation: Oct 2007
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Handle: RePEc:cpb:docmnt:153

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Related research
Keywords: International migration public policy redistribution

Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

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    Other versions:
  2. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-37, October. [Downloadable!] (restricted)
    Other versions:
  3. Alexander Kemnitz, 2002. "On the Political Economy of Low Skilled Immigration and the Welfare State," International Tax and Public Finance, Springer, vol. 9(4), pages 423-434, August. [Downloadable!] (restricted)
  4. Flavia Coda Moscarola, 2001. "The Effects of Immigration Inflows on the Sustainability of the Italian Welfare States," CeRP Working Papers 06, Center for Research on Pensions and Welfare Policies, Turin (Italy). [Downloadable!]
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    Other versions:
  6. Madeline Zavodny, 1998. "Determinants of recent immigrants' locational choices," Working Paper 98-3, Federal Reserve Bank of Atlanta. [Downloadable!]
  7. Rotte, Ralph & Vogler, Michael, 1998. "Determinants of International Migration: Empirical Evidence for Migration from Developing Countries to Germany," IZA Discussion Papers 12, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. Husted, Leif & Nielsen, Helena Skyt & Rosholm, Michael & Smith, Nina, 2000. "Employment and Wage Assimilation of Male First Generation Immigrants in Denmark," IZA Discussion Papers 101, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  9. 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:
  10. Dustmann, C, 1993. "Earnings Adjustment of Temporary Migrants," Journal of Population Economics, Springer, vol. 6(2), pages 153-68, May.
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  13. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Blackwell Publishing, vol. 19(3), pages 451-477, 07. [Downloadable!] (restricted)
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  14. M. Collado & Iñigo Iturbe-Ormaetxe & Guadalupe Valera, 2004. "Quantifying the Impact of Immigration on the Spanish Welfare State," Asia-Pacific Financial Markets, Springer, vol. 11(3), pages 335-353, May. [Downloadable!] (restricted)
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  15. Thomas Liebig & Alfonso Sousa-Poza, 2004. "Migration, Self-Selection and Income Inequality: An International Analysis," Kyklos, Blackwell Publishing, vol. 57(1), pages 125-146, 02. [Downloadable!] (restricted)
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  19. Jörn-Steffen Pischke & Johannes Velling, 1997. "Employment Effects Of Immigration To Germany: An Analysis Based On Local Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 594-604, November. [Downloadable!] (restricted)
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  22. Neeraj Kaushal, 2005. "New Immigrants' Location Choices: Magnets without Welfare," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 59-80, January. [Downloadable!]
  23. Borjas, George J & Hilton, Lynette, 1996. "Immigration and the Welfare State: Immigrant Participation in Means-Tested Entitlement Programs," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 575-604, May. [Downloadable!] (restricted)
    Other versions:
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