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Resisting Migration: Wage Rigidity and Income Distribution

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Author Info
Razin, Assaf
Sadka, Efraim

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Abstract

Like any trade activity, migration tends to generate gains to all parties involved - the migrants as well as the native-born population. With a mal-functioning labour market, however, migration will exacerbate the imperfections in the market. Consequently, it may lead to losses to the native-born population which are typically quite sizeable. Another economic problem raised by migration is the additional toll imposed on the welfare-state income-distribution institutions. Being unable to exclude migrants from the various entitlement programmes and public services, the modern welfare state can find migration rather costly. These two economic considerations may help explain the resistance to migration despite the pure gains-from-trade benefits created by it. Immigration could be more beneficial to the native-born population when labour markets are better functioning and the welfare programmes are less comprehensive.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1091.

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Date of creation: Jan 1995
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Handle: RePEc:cpr:ceprdp:1091

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Related research
Keywords: Demogrants Income Taxes International Migration Investment in Human Capital Public Services Skilled and Unskilled Labour

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Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

Cited by:
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  1. Alexander Kemnitz, 2005. "Can Immigrant Employment Alleviate the Demographic Burden? The Role of Union Centralization," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  2. Assaf Razin & Effraim Sadka & Phillip Swagel, 1998. "Tax Burden and Migration: A Political Economy Theory and Evidence," NBER Working Papers 6734, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Karin Mayr, 2004. "The fiscal impact of immigrants in Austria--a generational accounting analysis," Economics working papers 2004-09, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
    Other versions:
  4. 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)
  5. Alexander Kemnitz, . "Unemployment, Technology and the Welfare Effects of Immigration," IVS discussion paper series 611, Institut für Volkswirtschaft und Statistik (IVS), University of Mannheim. [Downloadable!]
  6. de Melo, Jaime & Grether, Jean-Marie & Müller, Tobias, 2001. "The Political Economy of International Migration in a Ricardo-Viner Model," CEPR Discussion Papers 2714, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Yuji Tamura, 2006. "Disagreement over the immigration of low-income earners in a welfare state," Journal of Population Economics, Springer, vol. 19(4), pages 691-702, October. [Downloadable!] (restricted)
  8. Assaf Razin & Efraim Sadka, 1996. "Tax Burden and Migration: A Political Economy Perspective," NBER Working Papers 5850, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  9. Phillip Swagel & Efraim Sadka & Assaf Razin, 2002. "The Aging of the Population and the Size of the Welfare State," IMF Working Papers 02/68, International Monetary Fund. [Downloadable!]
  10. Tamura, Yuji, 2004. "Referendum-Led Immigration Policy In The Welfare State," The Warwick Economics Research Paper Series (TWERPS) 713, University of Warwick, Department of Economics. [Downloadable!]
  11. Assaf Razin & Efraim Sadka, 1999. "Unskilled Migration: A Burden or a Boon for the Welfare State," NBER Working Papers 7013, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Serdar Sayan & Ali Emre Uyar, 2001. "Directions of Trade Flows and Labor Movements between high-and Low-Population Growth Countries: An Overlapping Generations General Equilibrium Analysis," Departmental Working Papers 0108, Bilkent University, Department of Economics. [Downloadable!]
    Other versions:
  13. Nir Dagan & Oscar Volij, 1995. "Formation of Nations in a Welfare State Minded World," Economic theory and game theory 002, Oscar Volij, revised Aug 1999. [Downloadable!]
    Other versions:
  14. Assaf Razin & Efraim Sadka, 1998. "Migration and Pension," NBER Working Papers 6778, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Assaf Razin & Efraim Sadka, 2003. "Privatizing Social Security Under Balanced-Budget Constraints: A Political-Economy Approach," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  16. Assaf Razin, 2001. "Policy implications of demographic change: panel discussion: notes on demographic changes and the welfare state," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, pages 289-296. [Downloadable!]
  17. 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 GmbH. [Downloadable!]
  18. Fabio Canova & Morten Ravn, 2000. "The Macroeconomic Effects of German Unification: Real Adjustments and the Welfare State," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(3), pages 423-460, July. [Downloadable!] (restricted)
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  19. Razin, Assaf & Sadka, Efraim & Swagel, Phill, 2001. "The Aging Population and the Size of the Welfare State," CEPR Discussion Papers 2930, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
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