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The Skill Composition of Migration and the Generosity of the Welfare State

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Author Info
Cohen, Alon
Razin, Assaf
Sadka, Efraim

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Abstract

Skilled migrants typically contribute to the welfare state more than they draw in benefits from it. The opposite holds for unskilled migrants. This suggests that a host country is likely to boost (respectively, curtail) its welfare system when absorbing high-skill (respectively, low-skill) migration. In this paper we first examine this hypothesis in a politico-economic setup. We then confront the prediction of the theory with evidence. In doing so, we reckon with an endogeneity problem that arise because the skill composition of migration is itself affected by the generosity of the welfare state.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 7185.

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Date of creation: Feb 2009
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Handle: RePEc:cpr:ceprdp:7185

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Related research
Keywords: skilled vs low skilled migrants; welfare migration;

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Find related papers by JEL classification:
F22 - International Economics - - International Factor Movements and International Business - - - International Migration
H10 - Public Economics - - Structure and Scope of Government - - - General

This paper has been announced in the following NEP Reports:

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. Kjetil Storesletten, . "Sustaining Fiscal Policy Through Immigration," Homapage Papers _005, Stockholm University, Institute for International Economic Studies. [Downloadable!]
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  2. Gordon H. Hanson, 2008. "The Economic Consequences of the International Migration of Labor," NBER Working Papers 14490, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. 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)
  4. Jeffrey A. Frankel & David Romer, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June. [Downloadable!] (restricted)
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This page was last updated on 2009-11-25.

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