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Does migration threaten the sustainability of European welfare states?

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  • Peter Huber
  • Doris A. Oberdabernig

Abstract

We investigate the relative contributions of migrant and native households to welfare states. Using two step Oaxaca-Blinder decompositions that control for selection into bene t take-up, we are able to identify the individual variables contributing to di erences in welfare receipt by native and migrant households. We nd that most of the di erences are explained by observable characteristics such as size of the household as well as age and education of its head and income in some countries. In contrast, signi cantly lower net contributions of migrant households to the state budget persist in many countries even after controlling for observable factors. The reasons for this are primarily lower tax payments of migrant households. Selective migration and sound integration policies and as well as policies avoiding marginalization of migrants in informal labor markets are therefore the most e ective means to avoid scal burdens of migration.

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Bibliographic Info

Paper provided by WWWforEurope in its series WWWforEurope Working Papers series with number 21.

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Length: 135
Date of creation: Jul 2013
Date of revision:
Publication status: published
Handle: RePEc:feu:wfewop:y:2013:m:7:d:0:i:21

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Keywords: Oaxaca-Blinder decomposition; EU-countries; migration; net contributions; welfare state;

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References

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  1. Thomas Bauer & Mathias Sinning, 2006. "An Extension of the Blinder-Oaxaca Decomposition to Non-Linear Models," RWI Discussion Papers 0049, Rheinisch-Westfälisches Institut für Wirtschaftsforschung.
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  3. Pellizzari, Michele, 2011. "The Use of Welfare by Migrants in Italy," IZA Discussion Papers 5613, Institute for the Study of Labor (IZA).
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  8. 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.
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  10. Christian Dustmann & Tommaso Frattini & Caroline Halls, 2010. "Assessing the Fiscal Costs and Benefits of A8 Migration to the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 31(1), pages 1-41, 03.
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  12. Barrett, Alan & McCarthy, Yvonne, 2008. "Immigrants and Welfare Programmes: Exploring the Interactions between Immigrant Characteristics, Immigrant Welfare Dependence and Welfare Policy," IZA Discussion Papers 3494, Institute for the Study of Labor (IZA).
  13. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
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  15. Storesletten, Kjetil, 2001. "Fiscal Implications of Immigration - A Net Present Value Calculation -," Seminar Papers 701, Stockholm University, Institute for International Economic Studies.
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Cited by:
  1. Karl Aiginger & Kurt Kratena & Margit Schratzenstaller & Teresa Weiss, 2014. "Moving towards a new growth model," WWWforEurope Deliverables series 3, WWWforEurope.

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