IDEAS home Printed from https://ideas.repec.org/b/wfo/wstudy/46882.html
   My bibliography  Save this book

Does Migration Threaten the Sustainability of European Welfare States? WWWforEurope Working Paper No. 21

Author

Listed:
  • Peter Huber
  • Doris A. Oberdabernig

    (WIFO)

Abstract

We investigate the relative contributions of migrant and native households to welfare states. Using two step Oaxaca-Blinder decompositions that control for selection into benefit take-up, we are able to identify the individual variables contributing to differences in welfare receipt by native and migrant households. We find that most of the differences are explained by observable characteristics such as size of the household as well as age and education of its head and income in some countries. In contrast, significantly lower net contributions of migrant households to the state budget persist in many countries even after controlling for observable factors. The reasons for this are primarily lower tax payments of migrant households. Selective migration and sound integration policies as well as policies avoiding marginalisation of migrants in informal labour markets are therefore the most effective means to avoid fiscal burdens of migration.

Suggested Citation

  • Peter Huber & Doris A. Oberdabernig, 2013. "Does Migration Threaten the Sustainability of European Welfare States? WWWforEurope Working Paper No. 21," WIFO Studies, WIFO, number 46882, February.
    • Handle: RePEc:wfo:wstudy:46882
    as

    Download full text from publisher

    File URL: https://www.wifo.ac.at/wwa/pubid/46882
    File Function: abstract
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Karin Mayr, 2005. "The Fiscal Impact of Immigrants in Austria – A Generational Accounting Analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(2), pages 181-216, June.
    2. Tito Boeri, 2010. "Immigration to the Land of Redistribution," Economica, London School of Economics and Political Science, vol. 77(308), pages 651-687, October.
    3. Myeong-Su Yun, 2005. "A Simple Solution to the Identification Problem in Detailed Wage Decompositions," Economic Inquiry, Western Economic Association International, vol. 43(4), pages 766-772, October.
    4. Barrett, Alan & McCarthy, Yvonne, 2007. "The Earnings of Immigrants in Ireland: Results from the 2005 EU Survey of Income and Living Conditions," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2007(4-Winter), pages 42-62.
    5. 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.
    6. Blume, Kraen & Verner, Mette, 2007. "Welfare dependency among Danish immigrants," European Journal of Political Economy, Elsevier, vol. 23(2), pages 453-471, June.
    7. Michele Pellizzari, 2013. "The use of welfare by migrants in Italy," International Journal of Manpower, Emerald Group Publishing Limited, vol. 34(2), pages 155-166, May.
    8. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 1019-1055.
    9. Ben Jann, 2005. "Standard Errors for the Blinder-Oaxaca Decomposition," German Stata Users' Group Meetings 2005 03, Stata Users Group.
    10. Alan Barrett & Yvonne McCarthy, 2008. "Immigrants and welfare programmes: exploring the interactions between immigrant characteristics, immigrant welfare dependence, and welfare policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 24(3), pages 543-560, Autumn.
    11. Hans Fehr & Sabine Jokisch & Laurence J. Kotlikoff, 2004. "The Role of Immigration in Dealing with the Developed World's Demographic Transition," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 60(3), pages 296-324, September.
    12. George J. Borjas & Lynette Hilton, 1996. "Immigration and the Welfare State: Immigrant Participation in Means-Tested Entitlement Programs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 575-604.
    13. Kjetil Storesletten, 2003. "Fiscal Implications of Immigration—A Net Present Value Calculation," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(3), pages 487-506, September.
    14. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
    15. Daniel A. Powers & Hirotoshi Yoshioka & Myeong-Su Yun, 2011. "mvdcmp: Multivariate decomposition for nonlinear response models," Stata Journal, StataCorp LP, vol. 11(4), pages 556-576, December.
    16. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    17. Thomas Bauer & Mathias Sinning, 2008. "An extension of the Blinder–Oaxaca decomposition to nonlinear models," AStA Advances in Statistical Analysis, Springer;German Statistical Society, vol. 92(2), pages 197-206, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karl Aiginger, 2016. "New Dynamics for Europe: Reaping the Benefits of Socio-ecological Transition – Part I: Synthesis. WWWforEurope Deliverable No. 11," WIFO Studies, WIFO, number 58791, February.
    2. Karl Aiginger & Kurt Kratena & Margit Schratzenstaller & Teresa Weiss, 2014. "Moving Towards a New Growth Model. WWWforEurope Deliverable No. 3," WIFO Studies, WIFO, number 47247, February.
    3. Peter Huber & Marian Fink & Thomas Horvath, 2020. "Data Sources on Migrants' Labour Market and Education Integration in Austria," WIFO Working Papers 613, WIFO.
    4. Burgos-Mascarell, Andrea & Ribeiro-Soriano, Domingo & Martínez-López, Miguel, 2016. "Dystopia deconstructed: Applying the triple helix model to a failed utopia," Journal of Business Research, Elsevier, vol. 69(5), pages 1845-1850.
    5. Karl Aiginger & Marcus Scheiblecker, 2016. "Österreich 2025 – Eine Agenda für mehr Dynamik, sozialen Ausgleich und ökologische Nachhaltigkeit. Fortschrittsbericht," WIFO Studies, WIFO, number 58885, February.

    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. Peter Huber & Doris A. Oberdabernig, 2016. "Decomposing Welfare Wedges: An Analysis of Welfare Dependence of Immigrants and Natives in Europe," Kyklos, Wiley Blackwell, vol. 69(1), pages 82-107, February.
    2. 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).
    3. 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.
    4. Ian Preston, 2014. "The Effect of Immigration on Public Finances," Economic Journal, Royal Economic Society, vol. 124(580), pages 569-592, November.
    5. Kaczmarczyk, Pawel, 2015. "Burden or Relief? Fiscal Impacts of Recent Ukrainian Migration to Poland," IZA Discussion Papers 8779, Institute of Labor Economics (IZA).
    6. Peter Huber & Ulrike Huemer, 2015. "Gender Differences in Lifelong Learning: An Empirical Analysis of the Impact of Marriage and Children," LABOUR, CEIS, vol. 29(1), pages 32-51, March.
    7. Bettin, Giulia & Sacchi, Agnese, 2020. "Health spending in Italy: The impact of immigrants," European Journal of Political Economy, Elsevier, vol. 65(C).
    8. 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.
    9. 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.
    10. Ndeye Penda Sokhna & Lionel Ragot & Xavier Chojnicki, 2018. "The fiscal impact of 30 years of immigration in France: an accounting approach," Working Papers hal-04141694, HAL.
    11. Barr, Tavis & Lin, Carl, 2015. "A detailed decomposition of synthetic cohort analysis," Economics Letters, Elsevier, vol. 127(C), pages 76-80.
    12. Corrado Giulietti & Jackline Wahba, 2013. "Welfare migration," Chapters, in: Amelie F. Constant & Klaus F. Zimmermann (ed.), International Handbook on the Economics of Migration, chapter 26, pages 489-504, Edward Elgar Publishing.
    13. 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.
    14. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 1, pages 1-102, Elsevier.
    15. Vassilis Monastiriotis & Angelo Martelli, 2021. "Crisis, Adjustment and Resilience in the Greek Labor Market: An Unemployment Decomposition Approach," International Regional Science Review, , vol. 44(1), pages 85-112, January.
    16. Richard Mussa, 2013. "Rural--urban differences in parental spending on children's primary education in Malawi," Development Southern Africa, Taylor & Francis Journals, vol. 30(6), pages 789-811, December.
    17. Bryan, Mark & Bryce, Andrew & Rice, Nigel & Roberts, Jennifer & Sechel, Cristina, 2022. "Exploring mental health disability gaps in the labour market: the UK experience during COVID-19," Labour Economics, Elsevier, vol. 78(C).
    18. Hansen, Henrik & Rand, John & Win, Ngu Wah, 2022. "The gender wage gap in Myanmar: Adding insult to injury?," Journal of Asian Economics, Elsevier, vol. 81(C).
    19. Stephen Drinkwater & Catherine Robinson, 2013. "Welfare participation by immigrants in the UK," International Journal of Manpower, Emerald Group Publishing Limited, vol. 34(2), pages 100-112, May.
    20. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2010. "When Minority Labor Migrants Meet the Welfare State," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 633-676, July.

    More about this item

    Keywords

    TP_Nachhaltigkeit_Nachhaltigkeit;

    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:wfo:wstudy:46882. 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: Florian Mayr (email available below). General contact details of provider: https://edirc.repec.org/data/wifooat.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.