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Migration, Redistribution and the Universal Welfare Model

Author

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  • Andersen, Torben M.

    (Aarhus University)

Abstract

The universal Scandinavian welfare model offers generous tax financed social benefits. The scheme is associated with workfare elements as a targeting device to direct benefits to those considered deserving. Thereby social insurance and egalitarian outcomes are achieved while work incentives and thus a high employment rate crucial for the financial viability of the model are maintained. The scope for this policy may depend critically on the characteristics of the population (abilities and preferences) and thus be significantly affected by immigration affecting the distribution of characteristics, especially if the model attracts immigrants with particular characteristics. The paper develops a simple model capable of capturing the rationale and essence of the above-mentioned redistribution model and considers its sensitivity and robustness to immigration, which may change the composition of the population in the ability and/or preference dimension.

Suggested Citation

  • Andersen, Torben M., 2012. "Migration, Redistribution and the Universal Welfare Model," IZA Discussion Papers 6665, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6665
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    References listed on IDEAS

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    1. Assaf Razin & Jackline Wahba, 2015. "Welfare Magnet Hypothesis, Fiscal Burden, and Immigration Skill Selectivity," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(2), pages 369-402, April.
    2. Holzner, Christian & Meier, Volker & Werding, Martin, 2010. "Workfare, monitoring, and efficiency wages," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 157-168, March.
    3. Torben M. Andersen & Michael Svarer, 2014. "The Role of Workfare in Striking a Balance between Incentives and Insurance in the Labour Market," Economica, London School of Economics and Political Science, vol. 81(321), pages 86-116, January.
    4. Corrado Giulietti & Martin Guzi & Martin Kahanec & Klaus F. Zimmermann, 2013. "Unemployment benefits and immigration: evidence from the EU," International Journal of Manpower, Emerald Group Publishing Limited, vol. 34(1), pages 24-38, March.
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    11. Claus Thustrup Kreiner & Torben Tranæs, 2005. "Optimal Workfare with Voluntary and Involuntary Unemployment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 459-474, September.
    12. Amelie F. Constant & Martin Kahanec & Ulf Rinne & Klaus F. Zimmermann, 2011. "Ethnicity, job search and labor market reintegration of the unemployed," International Journal of Manpower, Emerald Group Publishing Limited, vol. 32(7), pages 753-776, October.
    13. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-637, October.
    14. Besley, Timothy & Coate, Stephen, 1992. "Workfare versus Welfare Incentive Arguments for Work Requirements in Poverty-Alleviation Programs," American Economic Review, American Economic Association, vol. 82(1), pages 249-261, March.
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    Cited by:

    1. Jose Antonio Alonso, 2015. "Managing Labour Mobility: A Missing Pillar of Global Governance," CDP Background Papers 026, United Nations, Department of Economics and Social Affairs.

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    More about this item

    Keywords

    work incentives; active labour market policy; redistribution;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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