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Migration into the Welfare State: Tax and Migration Competition

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  • Assaf Razin

Abstract

This paper provides overview of recent work on migration and welfare state tax policies: 1. I survey the literature on the tax burden of migration. 2. I empirically identify the differential effect of the generosity of the welfare state on the skill composition of immigrants across the two groups (the "free-migration" group and the "policy-restricted migration" group) in an unbiased way. 3. I outline the implications of the tax burden of migration to tax competition within a union, facing migration from the rest of the world.Each host country in a competitive regime balances on the margin these gains and losses from migration. In doing so, each country takes the well-being of the migrants as given. Therefore, It ignores the fact that a tax-migration policy that admits an extra migrant raises the well-being that must be accorded to migrants by all the other host countries, in order to elicit the migrant to come in; and more capital income leaks, through capital taxation, to immigrants.

Suggested Citation

  • Assaf Razin, 2013. "Migration into the Welfare State: Tax and Migration Competition," NBER Working Papers 19346, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19346
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    2. Augusto Cerqua & Guido Pellegrini & Ornella Tarola, 2022. "Can regional policies shape migration flows?," Papers in Regional Science, Wiley Blackwell, vol. 101(3), pages 515-536, June.
    3. Dowon Kim & Dongwon Lee, 2021. "Immigration and the pattern of public spending: evidence from OECD countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(4), pages 1014-1034, August.
    4. Edo Anthony, 2015. "The Impact of Immigration on Native Wages and Employment," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(3), pages 1151-1196, July.
    5. Jordi Jofre-Monseny & Pilar Sorribas-Navarro & Javier Vázquez-Grenno, 2016. "Immigration and local spending in social services: evidence from a massive immigration wave," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(6), pages 1004-1029, December.
    6. Yusun Kim, 2021. "How Does a Reduction in Mandated Medicaid Spending Affect Local Fiscal Behaviors? Evidence from New York State," Public Finance Review, , vol. 49(4), pages 495-547, July.
    7. Soojin Kim, 2014. "The Effects of Labor Migration on Optimal Taxation: An International Tax Competition Analysis," 2014 Meeting Papers 508, Society for Economic Dynamics.

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    More about this item

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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