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Free vs. Restricted Immigration: Bilateral Country Study

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Author Info

  • Razin, Assaf

    ()
    (Cornell University)

  • Wahba, Jackline

    ()
    (University of Southampton)

Abstract

This paper tests the differential effects of the generosity of the welfare state under free migration and under policy-controlled migration, distinguishing between source developing and developed countries. We utilize free-movement within the EU to examine the free migration regime and compare that to immigration into the EU from two other groups, developed and developing source countries, to capture immigration-restricted regimes. We standardize cross-country education quality differences by using the Hanushek-Woessmann (2009) cognitive skills measure. We find strong support for the "magnet hypothesis" under the free-migration regime, and the "fiscal burden hypothesis" under the immigration-restricted regime even after controlling for differences in returns to skills in source and host countries.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5546.

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Length: 40 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5546

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Keywords: migration; welfare state; EU;

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References

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  1. Blank, Rebecca M., 1988. "The effect of welfare and wage levels on the location decisions of female-headed households," Journal of Urban Economics, Elsevier, vol. 24(2), pages 186-211, September.
  2. Phillip B. Levine & David J. Zimmerman, 1999. "An empirical analysis of the welfare magnet debate using the NLSY," Journal of Population Economics, Springer, Springer, vol. 12(3), pages 391-409.
  3. Eric Hanushek & Ludger Woessmann, 2009. "Do Better Schools Lead to More Growth? Cognitive Skills, Economic Outcomes, and Causation," Discussion Papers, Stanford Institute for Economic Policy Research 08-015, Stanford Institute for Economic Policy Research.
  4. De Giorgi, Giacomo & Pellizzari, Michele, 2009. "Welfare migration in Europe," Labour Economics, Elsevier, Elsevier, vol. 16(4), pages 353-363, August.
  5. J. R. Walker, . "Migration amoung low-income households: Helping the witch doctors reach consensus," Institute for Research on Poverty Discussion Papers 1031-94, University of Wisconsin Institute for Research on Poverty.
  6. Enchautegui, Maria E, 1997. "Welfare Payments and Other Economic Determinants of Female Migration," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 15(3), pages 529-54, July.
  7. repec:ebl:ecbull:v:6:y:2006:i:2:p:1-11 is not listed on IDEAS
  8. Nicolas Péridy, 2006. "The European Union and its new neighbors: an estimation of migration potentials," Economics Bulletin, AccessEcon, vol. 6(2), pages 1-11.
  9. Razin, Assaf & Sadka, Efraim & Swagel, Phillip, 1998. "Tax Burden and Migration," Economics Series, Institute for Advanced Studies 59, Institute for Advanced Studies.
  10. Timothy Miller & Ronald Lee, 2000. "Immigration, Social Security, and Broader Fiscal Impacts," American Economic Review, American Economic Association, American Economic Association, vol. 90(2), pages 350-354, May.
  11. Edward M. Gramlich & Deborah S. Laren, 1984. "Migration and Income Redistribution Responsibilities," Journal of Human Resources, University of Wisconsin Press, vol. 19(4), pages 489-511.
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Cited by:
  1. Strom, Steinar & Venturini, Alessandra & Villosio, Claudia, 2013. "Wage Assimilation: Migrants versus Natives and Foreign Migrants versus Internal Migrants," Department of Economics and Statistics Cognetti de Martiis. Working Papers, University of Turin 201341, University of Turin.
  2. Skupnik, Christoph, 2013. ""Welfare magnetism" in the EU-15? Why the EU enlargement did not start a race to the bottom of welfare states," Discussion Papers 2013/8, Free University Berlin, School of Business & Economics.

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