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Welfare Migration in Europe and the Cost of a Harmonised Social Assistance

Author

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  • De Giorgi, Giacomo

    () (Federal Reserve Bank of New York)

  • Pellizzari, Michele

    () (University of Geneva)

Abstract

The enlargement of the European Union has increased concerns about the role of generous welfare transfers in attracting migrants. This paper explores the issue of welfare migration across the 15 countries of the pre-enlargement Union and finds a significant but small effect of the generosity of welfare on migration decisions. This effect, however, is still large enough to distort the distribution of migration flows and, possibly, offset the potential benefits of migration as an inflow of mobile labour into countries with traditionally sedentary native workers. A possible way to eliminate these distortions is the harmonisation of welfare at the level of the Union. The second part of the paper estimates the costs and benefits of what could be a first step in this direction: the introduction of a uniform European minimum income. The results show that, for a realistic minimum income threshold, the new system would cost about three quarters of what is currently spent on housing and social assistance benefits. Despite its reasonable cost, the distribution of net donors and net receivers across countries is such that the actual implementation of this system would be politically problematic.

Suggested Citation

  • De Giorgi, Giacomo & Pellizzari, Michele, 2006. "Welfare Migration in Europe and the Cost of a Harmonised Social Assistance," IZA Discussion Papers 2094, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp2094
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    References listed on IDEAS

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    1. John Kennan & James R. Walker, 2011. "The Effect of Expected Income on Individual Migration Decisions," Econometrica, Econometric Society, vol. 79(1), pages 211-251, January.
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    Cited by:

    1. Kahanec, Martin & Zimmermann, Klaus F., 2008. "Migration in an Enlarged EU: A Challenging Solution?," IZA Discussion Papers 3913, Institute for the Study of Labor (IZA).
    2. Gordon Hanson, 2010. "The Governance of Migration Policy," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 11(2), pages 185-207.
    3. Efraim Sadka & Ben Suwankiri & Assaf Razin, 2010. "The Welfare State and the Skill Mix of Migration: Dynamic Policy Formation," 2010 Meeting Papers 13, Society for Economic Dynamics.
    4. Alon Cohen & Assaf Razin, 2008. "The Skill Composition of Immigrants and the Generosity of the Welfare State: Free vs. Policy-Controlled Migration," NBER Working Papers 14459, National Bureau of Economic Research, Inc.
    5. Tito Boeri, 2010. "Immigration to the Land of Redistribution," Economica, London School of Economics and Political Science, vol. 77(308), pages 651-687, October.
    6. Warin Thierry & Svaton Pavel, 2008. "European Migration: Welfare Migration or Economic Migration?," Global Economy Journal, De Gruyter, vol. 8(3), pages 1-32, September.
    7. Assaf Razin & Efraim Sadka & Benjarong Suwankiri, 2009. "Migration and the welfare state: Dynamic Political-Economy Theory," NBER Working Papers 14784, National Bureau of Economic Research, Inc.
    8. Nele van der Wielen & Jakub Bijak, 2015. "Welfare participation: A comparison between immigrants and natives in the United Kingdom," Migration Letters, Transnational Press London, UK, vol. 12(2), pages 113-123, May.
    9. Una Okonkwo Osili & Jia Xie, 2009. "Do Immigrants and Their Children Free Ride More Than Natives?," American Economic Review, American Economic Association, vol. 99(2), pages 28-34, May.
    10. Brenke, Karl & Yuksel, Mutlu & Zimmermann, Klaus F, 2009. "EU Enlargement under Continued Mobility Restrictions: Consequences for the German Labor Market," CEPR Discussion Papers 7274, C.E.P.R. Discussion Papers.
    11. Jana Tepperová & Stanislav Klazar, 2012. "Vliv sociálních systémů a jejich koordinace na ekonomickou migraci
      [The Impact of Social Systems and their Coordination on Economic Migration]
      ," Politická ekonomie, University of Economics, Prague, vol. 2012(4), pages 505-522.
    12. Assaf Razin & Alon Cohen, 2009. "International migration and the generosity of the welfare state: free vs policy-controlled migration," 2009 Meeting Papers 200, Society for Economic Dynamics.
    13. David Saha & Ronnie Schöb, 2015. "Unemployment Insurance in Unionized Labor Markets: Neither Ghent nor Centralized," CESifo Working Paper Series 5430, CESifo Group Munich.
    14. Kenneth Nelson, 2009. "Social Assistance and Minimum Income Protection in the EU: Vulnerability, Adequacy, and Convergence," LIS Working papers 511, LIS Cross-National Data Center in Luxembourg.
    15. Kahanec, Martin & Zaiceva, Anzelika & Zimmermann, Klaus F., 2009. "Lessons from Migration after EU Enlargement," IZA Discussion Papers 4230, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    welfare state; migration; EU enlargement;

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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