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Unemployment Benefits and Immigration: Evidence from the EU

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  • Giulietti, Corrado
  • Guzi, Martin
  • Kahanec, Martin
  • Zimmermann, Klaus F

Abstract

The paper studies the impact of unemployment benefits on immigration. A sample of 19 European countries observed over the period 1993 to 2008 is used to test the hypothesis that unemployment benefit spending (UBS) is correlated with immigration flows from EU and non-EU origins. While OLS estimates reveal the existence of a moderate correlation for non-EU immigrants only, IV and GMM techniques used to address endogeneity issues yield, respectively, a much smaller and an essentially zero causal impact of UBS on immigration. All estimates for immigrants from EU origins indicate that flows within the EU are not related to unemployment benefit generosity. This suggests that the so-called 'welfare migration' debate is misguided and not based on empirical evidence.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8672.

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Date of creation: Nov 2011
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Handle: RePEc:cpr:ceprdp:8672

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Keywords: European Union; immigration; unemployment benefit spending; welfare magnets;

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References

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  1. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-37, October.
  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.
  3. Alan Barrett & Bertrand Maître, 2013. "Immigrant welfare receipt across Europe," International Journal of Manpower, Emerald Group Publishing, vol. 34(1), pages 8-23, January.
  4. Nannestad, Peter, 2007. "Immigration and welfare states: A survey of 15 years of research," European Journal of Political Economy, Elsevier, vol. 23(2), pages 512-532, June.
  5. Cohen, Alon & Razin, Assaf & Sadka, Efraim, 2009. "The Skill Composition of Migration and the Generosity of the Welfare State," CEPR Discussion Papers 7185, C.E.P.R. Discussion Papers.
  6. Heitmueller, Axel, 2002. "Unemployment Benefits, Risk Aversion, and Migration Incentives," IZA Discussion Papers 610, Institute for the Study of Labor (IZA).
  7. Roberto Perotti & Massimo V. Rostagno & Gian-Maria Milesi-Ferretti, 2001. "Electoral System and Public Spending," IMF Working Papers 01/22, International Monetary Fund.
  8. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2008. "Selection and network effects--Migration flows into OECD countries 1990-2000," European Economic Review, Elsevier, vol. 52(7), pages 1160-1186, October.
  9. De Giorgi, Giacomo & Pellizzari, Michele, 2009. "Welfare migration in Europe," Labour Economics, Elsevier, vol. 16(4), pages 353-363, August.
  10. Lubomira Anastassova & Teodora Paligorova, 2005. "Why Immigrants Manage to Grab More SocialBenefits? Empirical Cross - Country Analysis," CERGE-EI Working Papers wp263, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
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Citations

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Cited by:
  1. Eichhorst, Werner & Giulietti, Corrado & Guzi, Martin & Kendzia, Michael J. & al., et, 2011. "Report No. 40: The Integration of Migrants and its Effects on the Labour Market," IZA Research Reports 40, Institute for the Study of Labor (IZA).
  2. Andersen, Torben M, 2012. "Migration, Redistribution and the Universal Welfare Model," IZA Discussion Papers 6665, Institute for the Study of Labor (IZA).
  3. Martin Kahanec, 2012. "Labor Mobility in an Enlarged European Union," Discussion Papers 2, Central European Labour Studies Institute (CELSI).
  4. Fertig, Michael & Kahanec, Martin, 2013. "Mobility in an Enlarging European Union: Projections of Potential Flows from EU's Eastern Neighbors and Croatia," IZA Discussion Papers 7634, Institute for the Study of Labor (IZA).
  5. John Palmer & Mariola Pytlikova, 2013. "Labor Market Laws and Intra-European Migration: The Role of the State in Shaping Destination Choices," Discussion Papers 9, Central European Labour Studies Institute (CELSI).
  6. Marta Kaska & Tiiu Paas, 2013. "An empirical analysis of cross-border labour mobility in the case of Estonia," Norface Discussion Paper Series 2013016, Norface Research Programme on Migration, Department of Economics, University College London.
  7. Alan Barrett & Martin Kahanec & Klaus F. Zimmermann, 2013. "Pitfalls of immigrant inclusion into the European welfare state," International Journal of Manpower, Emerald Group Publishing, vol. 34(1), pages 97-98, January.
  8. Kahanec, Martin & Králiková, Renáta, 2011. "Pulls of International Student Mobility," IZA Discussion Papers 6233, Institute for the Study of Labor (IZA).
  9. Constant, Amelie F. & Nottmeyer, Olga & Zimmermann, Klaus F., 2012. "The Economics of Circular Migration," IZA Discussion Papers 6940, Institute for the Study of Labor (IZA).
  10. Mart Kaska & Tiiu Paas, 2013. "Cross-Border Labour Flows From Estonia To Neighbouring Countries," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 91, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  11. Corrado Giulietti & Jackline Wahba, 2012. "Welfare Migration," Norface Discussion Paper Series 2012038, Norface Research Programme on Migration, Department of Economics, University College London.
  12. Martin Kahanec & Renáta Králiková, 2012. "Higher Education Policy and Migration: The Role of International Student Mobility," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 9(4), pages 20-27, 02.
  13. Hinte, Holger & Rinne, Ulf & Zimmermann, Klaus F., 2011. "Zuwanderung, Demografie und Arbeitsmarkt: Fakten statt Vorbehalte," IZA Standpunkte 37, Institute for the Study of Labor (IZA).
  14. Constant, Amelie F., 2011. "Sizing It Up: Labor Migration Lessons of the EU Enlargement to 27," IZA Discussion Papers 6119, Institute for the Study of Labor (IZA).
  15. Ian Preston, 2013. "The Effect of Immigration on Public Finances," CReAM Discussion Paper Series 1323, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  16. Brian Fabo & Martin Kahanec, 2013. "Migration strategies of the crisis-stricken youth in an enlarged European Union," Discussion Papers 6, Central European Labour Studies Institute (CELSI).
  17. Betz, William & Simpson, Nicole B., 2013. "The Effects of International Migration on the Well-Being of Native Populations in Europe," IZA Discussion Papers 7368, Institute for the Study of Labor (IZA).
  18. Alessandra Venturini, 2012. "Methodological Aspects of Research on Flows Human Capital Flows: A survey," RSCAS Working Papers carim2012/01, European University Institute.

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