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Trading off Welfare and Immigration in Europe

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  • Hansen, Ole-Petter Moe

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Legge, Stefan

    (University of St. Gallen)

Abstract

In this paper, we explore the trade-off Europe faces when choosing between immigration from poor countries and welfare spending. Using data from the European Social Survey on sixteen countries from 2002-2012, we document that voter preferences shifted in favor of redistribution but polarized over low-skill immigration. Notably, there is a sharp increase in the share of individuals supporting the welfare state but heavily opposing immigration. In order to provide an economic explanation for these phenomena, we present a model where support for both immigration and redistributive policies are potentially motivated by altruism. Using this model, we show how rising unemployment rates, shares of foreign-born citizens and aggregate education can explain observed shifts in policy preferences.

Suggested Citation

  • Hansen, Ole-Petter Moe & Legge, Stefan, 2015. "Trading off Welfare and Immigration in Europe," Discussion Paper Series in Economics 22/2015, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2015_022
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    References listed on IDEAS

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    Cited by:

    1. Ole-Petter Moe Hansen & Stefan Legge, 2016. "Drawbridges Down: Altruism and Immigration Preferences," CESifo Working Paper Series 6204, CESifo.

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    More about this item

    Keywords

    Redistribution; Immigration; Unemployment; Inequality.;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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