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Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity

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  • Assaf Razin
  • Jackline Wahba

Abstract

This paper revisits the magnet hypothesis and investigates the impact of the welfare generosity on the difference between skilled and unskilled migration rates. The main purpose of the paper is to assess the role of mobility restriction on shaping the effect of the welfare state genrosity. In a free migration regime, the impact is expected to be negative on the skill composition of migrants while in a restricted mobility regime, the impact will be the opposite, as voters will prefer selective migration policies, favoring skilled migrants who tend to be net contributors to the fiscal system. We utilize the free labor movement within EUR (the EU, Norway and Switzerland) and the restricted movement from outside of the EUR to compare the free migration.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17515.

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Date of creation: Oct 2011
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Publication status: published as Assaf Razin and Jackie Wahba “Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity,” The Scandinavian Journal of Economics special issue on “Migration and Development”, 2014.
Handle: RePEc:nbr:nberwo:17515

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  1. Grogger, Jeffrey & Hanson, Gordon H., 2011. "Income maximization and the selection and sorting of international migrants," Journal of Development Economics, Elsevier, vol. 95(1), pages 42-57, May.
  2. Jan K. Brueckner, 1999. "Welfare Reform and the Race to the Bottom: Theory and Evidence," Southern Economic Journal, Southern Economic Association, vol. 66(2), pages 505-525, January.
  3. George J. Borjas, 1988. "Self-Selection and the Earnings of Immigrants," NBER Working Papers 2248, National Bureau of Economic Research, Inc.
  4. Phillip B. Levine & David J. Zimmerman, 1999. "An empirical analysis of the welfare magnet debate using the NLSY," Journal of Population Economics, Springer, vol. 12(3), pages 391-409.
  5. Frédéric Docquier & Hillel Rapoport & Sara Salomone, 2011. "Remittances, Migrants’ Education and Immigration Policy: Theory and Evidence from Bilateral Data," Working Papers 2011-27, Department of Economics, Bar-Ilan University.
  6. De Giorgi, Giacomo & Pellizzari, Michele, 2009. "Welfare migration in Europe," Labour Economics, Elsevier, vol. 16(4), pages 353-363, August.
  7. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-37, October.
  8. Daron Acemoglu & Simon Johnson, 2005. "Unbundling Institutions," Journal of Political Economy, University of Chicago Press, vol. 113(5), pages 949-995, October.
  9. Serge Coulombe & Jean-Francois Tremblay, 2009. "Migration and Skills Disparities across the Canadian Provinces," Regional Studies, Taylor & Francis Journals, vol. 43(1), pages 5-18.
  10. McKinnish, Terra, 2007. "Welfare-induced migration at state borders: New evidence from micro-data," Journal of Public Economics, Elsevier, vol. 91(3-4), pages 437-450, April.
  11. Enchautegui, Maria E, 1997. "Welfare Payments and Other Economic Determinants of Female Migration," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 529-54, July.
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Cited by:
  1. Assaf Razin, 2013. "Migration into the Welfare State: Tax and Migration Competition," CESifo Working Paper Series 4230, CESifo Group Munich.
  2. Andersen, Torben M, 2012. "Migration, Redistribution and the Universal Welfare Model," IZA Discussion Papers 6665, Institute for the Study of Labor (IZA).
  3. Giulietti, Corrado & Wahba, Jackline, 2012. "Welfare Migration," IZA Discussion Papers 6450, Institute for the Study of Labor (IZA).
  4. Giuranno, Michele G. & Rongili, Biswas, 2012. "Inter-jurisdictional migration and the size of government," MPRA Paper 42604, University Library of Munich, Germany.

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