IDEAS home Printed from https://ideas.repec.org/p/nor/wpaper/2013006.html
   My bibliography  Save this paper

Fiscal Costs and Benefits of High Skilled Immigration to a Generous Welfare State

Author

Listed:
  • Sofie Bødker

    (University of Copenhagen and CEBR)

  • Rasmus Højbjerg Jacobsen

    (CEBR, Copenhagen Business School)

  • Jan Rose Skaksen

    (Economics Department, Copenhagen Business School, CEBR, IZA and CReAM)

Abstract

We consider the fiscal impact of work related high skilled immigration to a generous welfare state. In a simple theoretical model, we show that, even though a generous welfare state tends to attract immigrants with a high demand for public services, the high skilled immigrants may still be selected among individuals with a relatively low demand of public services. In the empirical analysis we apply a unique Danish data set containing very detailed information on all residents in Denmark, including information on migration. Denmark is interesting, because it has one of the most generous welfare states in the world, and, in spite of that, it turns out that high skilled immigration gives rise to a big net fiscal surplus. Further, high skilled immigrants seem to be selected among those having a relatively low demand of public services.

Suggested Citation

  • Sofie Bødker & Rasmus Højbjerg Jacobsen & Jan Rose Skaksen, 2013. "Fiscal Costs and Benefits of High Skilled Immigration to a Generous Welfare State," Norface Discussion Paper Series 2013006, Norface Research Programme on Migration, Department of Economics, University College London.
    • Handle: RePEc:nor:wpaper:2013006
    as

    Download full text from publisher

    File URL: http://www.norface-migration.org/publ_uploads/NDP_06_13.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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, March.
    2. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
    3. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 2021. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 8, pages 163-234, World Scientific Publishing Co. Pte. Ltd..
    4. George J. Borjas & Bernt Bratsberg, 2021. "Who Leaves? The Outmigration Of The Foreign-Born," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 5, pages 93-104, World Scientific Publishing Co. Pte. Ltd..
    5. George J. Borjas, 2021. "Self-Selection and the Earnings of Immigrants," World Scientific Book Chapters, in: Foundational Essays in Immigration Economics, chapter 4, pages 69-91, World Scientific Publishing Co. Pte. Ltd..
    6. McDonald, James Ted & Kennedy, Steven, 2004. "Insights into the 'healthy immigrant effect': health status and health service use of immigrants to Canada," Social Science & Medicine, Elsevier, vol. 59(8), pages 1613-1627, October.
    7. Card, David, 2001. "Immigrant Inflows, Native Outflows, and the Local Labor Market Impacts of Higher Immigration," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 22-64, January.
    8. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    9. Steven Kennedy & James Ted McDonald & Nicholas Biddle, 2006. "The Healthy Immigrant Effect and Immigrant Selection: Evidence from Four Countries," Social and Economic Dimensions of an Aging Population Research Papers 164, McMaster University.
    10. Dustmann, Christian & Fadlon, Itzhak & Weiss, Yoram, 2011. "Return migration, human capital accumulation and the brain drain," Journal of Development Economics, Elsevier, vol. 95(1), pages 58-67, May.
    11. Robert Rowthorn, 2008. "The fiscal impact of immigration on the advanced economies," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(3), pages 561-581, Autumn.
    12. Jörn-Steffen Pischke & Johannes Velling, 1997. "Employment Effects Of Immigration To Germany: An Analysis Based On Local Labor Markets," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 594-604, November.
    13. Abowd, John M. & Kramarz, Francis, 1999. "The analysis of labor markets using matched employer-employee data," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 40, pages 2629-2710, Elsevier.
    14. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-637, October.
    15. Malchow-Møller, Nikolaj & Munch, Jakob R. & Skaksen, Jan Rose, 2009. "Do Immigrants Take the Jobs of Native Workers?," IZA Discussion Papers 4111, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dustmann, Christian & Glitz, Albrecht, 2011. "Migration and Education," Handbook of the Economics of Education, in: Erik Hanushek & Stephen Machin & Ludger Woessmann (ed.), Handbook of the Economics of Education, edition 1, volume 4, chapter 0, pages 327-439, Elsevier.
    2. Christian Dustmann & Giovanni Facchini & Cora Signorotto, 2015. "Population, Migration, Ageing and Health: A Survey," RF Berlin - CReAM Discussion Paper Series 1518, Rockwool Foundation Berlin (RF Berlin) - Centre for Research and Analysis of Migration (CReAM).
    3. Christian Dustmann & Joseph-Simon Görlach, 2016. "The Economics of Temporary Migrations," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 98-136, March.
    4. Victoria Chorny & Rob Euwals & Kees Folmer, 2007. "Immigration policy and welfare state design; a qualitative approach to explore the interaction," CPB Document 153, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Bonin, Holger, 2017. "The Potential Economic Benefits of Education of Migrants in the EU," IZA Research Reports 75, Institute of Labor Economics (IZA).
    6. Zaiceva, A. & Zimmermann, K.F., 2016. "Migration and the Demographic Shift," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 119-177, Elsevier.
    7. Bettin, Giulia & Sacchi, Agnese, 2020. "Health spending in Italy: The impact of immigrants," European Journal of Political Economy, Elsevier, vol. 65(C).
    8. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    9. Pawel Kaczmarczyk, 2013. "Are immigrants a burden for the state budget? Review paper," EUI-RSCAS Working Papers p0356, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
    10. Hatton, Timothy J., 2014. "The economics of international migration: A short history of the debate," Labour Economics, Elsevier, vol. 30(C), pages 43-50.
    11. Kaczmarczyk, Pawel, 2015. "Burden or Relief? Fiscal Impacts of Recent Ukrainian Migration to Poland," IZA Discussion Papers 8779, Institute of Labor Economics (IZA).
    12. Nikolaj Malchow-Møller & Jakob R. Munch & Jan Rose Skaksen, 2012. "Do Immigrants Affect Firm-Specific Wages?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1267-1295, December.
    13. Papageorgiou, Athanasios, 2018. "The Effect of Immigration on the Well-Being of Native Populations: Evidence from the United Kingdom," MPRA Paper 93045, University Library of Munich, Germany.
    14. Peri, Giovanni, 2005. "Skills and Talent of Immigrants: A Comparison between the European Union and the United States," Institute of European Studies, Working Paper Series qt78t8m1n7, Institute of European Studies, UC Berkeley.
    15. Kahanec, Martin, 2012. "Skilled Labor Flows: Lessons from the European Union," IZA Research Reports 49, Institute of Labor Economics (IZA).
    16. Giovanni Peri & William Ambrosini & Karin Mayr & Dragos Radu, 2012. "The Selection of Migrants and Returnees in Romania: Evidence and long-run implications," Working Papers 136, University of California, Davis, Department of Economics.
    17. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr, 2018. "The Effects of Immigration in Developed Countries: Insights from Recent Economic Research," CEPII Policy Brief 2018-22, CEPII research center.
    18. Anthony Edo & Lionel Ragot & Hillel Rapoport & Sulin Sardoschau & Andreas Steinmayr & Arthur Sweetman, 2020. "An introduction to the economics of immigration in OECD countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(4), pages 1365-1403, November.
    19. Marcus H. Böhme & Sarah Kups, 2017. "The economic effects of labour immigration in developing countries: A literature review," OECD Development Centre Working Papers 335, OECD Publishing.
    20. Kahanec, Martin & Zimmermann, Klaus F., 2008. "Migration in an Enlarged EU: A Challenging Solution?," IZA Discussion Papers 3913, Institute of Labor Economics (IZA).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nor:wpaper:2013006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Norface Migration Administrator or Thomas Cornelissen (email available below). General contact details of provider: https://edirc.repec.org/data/cmucluk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.