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Migration, Redistribution and the Universal Welfare Model

  • Andersen, Torben M.

    ()

    (Aarhus University)

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    The universal Scandinavian welfare model offers generous tax financed social benefits. The scheme is associated with workfare elements as a targeting device to direct benefits to those considered deserving. Thereby social insurance and egalitarian outcomes are achieved while work incentives and thus a high employment rate crucial for the financial viability of the model are maintained. The scope for this policy may depend critically on the characteristics of the population (abilities and preferences) and thus be significantly affected by immigration affecting the distribution of characteristics, especially if the model attracts immigrants with particular characteristics. The paper develops a simple model capable of capturing the rationale and essence of the above-mentioned redistribution model and considers its sensitivity and robustness to immigration, which may change the composition of the population in the ability and/or preference dimension.

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    File URL: http://ftp.iza.org/dp6665.pdf
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    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6665.

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    Length: 27 pages
    Date of creation: Jun 2012
    Date of revision:
    Handle: RePEc:iza:izadps:dp6665
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    1. Katherine Cuff, 2000. "Optimality of workfare with heterogeneous preferences," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 149-174, February.
    2. Constant, Amelie F. & Kahanec, Martin & Rinne, Ulf & Zimmermann, Klaus F., 2009. "Ethnicity, Job Search and Labor Market Reintegration of the Unemployed," IZA Discussion Papers 4660, Institute for the Study of Labor (IZA).
    3. Giulietti, Corrado & Guzi, Martin & Kahanec, Martin & Zimmermann, Klaus F., 2011. "Unemployment Benefits and Immigration: Evidence from the EU," IZA Discussion Papers 6075, Institute for the Study of Labor (IZA).
    4. Torben Andersen & Michael Svarer, 2008. "The Role of Workfare in Striking a Balance between Incentives and Insurance in the Labour Market," CESifo Working Paper Series 2267, CESifo Group Munich.
    5. Brett, Craig, 1998. "Who Should Be on Workfare? The Use of Work Requirements as Part of an Optimal Tax Mix," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 607-22, October.
    6. Holzner, Christian & Meier, Volker & Werding, Martin, 2010. "Workfare, monitoring, and efficiency wages," Munich Reprints in Economics 19396, University of Munich, Department of Economics.
    7. Besley, Timothy & Coate, Stephen, 1992. "Workfare versus Welfare Incentive Arguments for Work Requirements in Poverty-Alleviation Programs," American Economic Review, American Economic Association, vol. 82(1), pages 249-61, March.
    8. Assaf Razin & Jackline Wahba, 2012. "Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity," Norface Discussion Paper Series 2012036, Norface Research Programme on Migration, Department of Economics, University College London.
    9. Borjas, George J, 1999. "Immigration and Welfare Magnets," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages 607-37, October.
    10. Claus Thustrup Kreiner & Torben Tranæs, 2003. "Optimal Workfare with Voluntary and Involuntary Unemployment," EPRU Working Paper Series 03-15, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics, revised Aug 2004.
    11. Pedersen, Peder J. & Pytlikova, Mariola & Smith, Nina, 2008. "Selection and network effects--Migration flows into OECD countries 1990-2000," European Economic Review, Elsevier, vol. 52(7), pages 1160-1186, October.
    12. Nicole M Fortin, 2005. "Gender Role Attitudes and the Labour-market Outcomes of Women across OECD Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 21(3), pages 416-438, Autumn.
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