Migration, Social Standards and Replacement Incomes: How to Protect Low-income Workers in the Industrialized Countries Against the Forces of Globalization and Market Integration
This paper discusses how an industrialized country could defend the wages and social benefits of its unskilled workers against wage competition from immigrants. It shows that fixing social standards harms the workers and that fixing social replacement incomes implies migration into unemployment. Defending wages with replacement incomes brings about first-order efficiency losses that outweigh the budget cost to the government. By contrast, wage subsidies involve much smaller welfare losses. While the exclusion of migrants from a national replacement program does not improve the situation, the (temporary) exclusion of migrants from a national subsidy program makes it possible to avoid a distortion of the migration pattern.
|Date of creation:||Sep 2004|
|Date of revision:|
|Publication status:||published as Sinn, Hans-Werner. "Migration And Social Replacement Incomes: How To Protect Low-Income Workers In The Industrialized Countries Against The Forces Of Globalization And Market Integration," International Tax and Public Finance, 2005, v12(4,Aug), 375-393.|
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- Hans-Werner Sinn, 1990.
"Tax Harmonization and Tax Competition in Europe,"
NBER Working Papers
3248, National Bureau of Economic Research, Inc.
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- Sinn, Hans-Werner, 2002. "EU enlargement and the future of the welfare state," Munich Reprints in Economics 19736, University of Munich, Department of Economics.
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