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Free vs. Controlled Migration: Bilateral Country Study

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  • Assaf Razin
  • Jackline Wahba

Abstract

This paper tests the differential effects of the generosity of the welfare state under free migration and under policy-controlled migration, distinguishing between source developing and developed countries. We utilize free-movement within the EU to examine the free migration regime and compare that to immigration into the EU from two other groups, developed and developing source countries, to capture immigration-restricted regimes. We standardize cross-country education quality differences by using the Hanushek-Woessmann (2009) cognitive skills measure. We find strong support for the "Magnet Hypothesis" under the free-migration regime, and the "Fiscal Burden Hypothesis" under the immigration- restricted regime even after controlling for differences in returns to skills in source and host countries. We also find a significant differences across host-country policy regimes in the effects of returns to skills on the skill mix of immigrants.

Suggested Citation

  • Assaf Razin & Jackline Wahba, 2011. "Free vs. Controlled Migration: Bilateral Country Study," NBER Working Papers 16831, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16831
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    References listed on IDEAS

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    1. Eric Hanushek & Ludger Woessmann, 2012. "Do better schools lead to more growth? Cognitive skills, economic outcomes, and causation," Journal of Economic Growth, Springer, vol. 17(4), pages 267-321, December.
    2. Timothy Miller & Ronald Lee, 2000. "Immigration, Social Security, and Broader Fiscal Impacts," American Economic Review, American Economic Association, vol. 90(2), pages 350-354, May.
    3. Razin, Assaf & Sadka, Efraim, 2000. " Unskilled Migration: A Burden or a Boon for the Welfare State?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(3), pages 463-479, June.
    4. Phillip B. Levine & David J. Zimmerman, 1999. "An empirical analysis of the welfare magnet debate using the NLSY," Journal of Population Economics, Springer;European Society for Population Economics, vol. 12(3), pages 391-409.
    5. Nicolas Péridy, 2006. "The European Union and its new neighbors: an estimation of migration potentials," Economics Bulletin, AccessEcon, vol. 6(2), pages 1-11.
    6. repec:ebl:ecbull:v:6:y:2006:i:2:p:1-11 is not listed on IDEAS
    7. Assaf Razin & Efraim Sadka, 2004. "Welfare Migration: Is the Net Fiscal Burden a Good Measure of its Economic Impact on the Welfare of the Native-Born Population?," CESifo Economic Studies, CESifo, vol. 50(4), pages 709-716.
    8. Breyer, Friedrich & Craig, Ben, 1997. "Voting on social security: Evidence from OECD countries," European Journal of Political Economy, Elsevier, vol. 13(4), pages 705-724, December.
    9. Edward M. Gramlich & Deborah S. Laren, 1984. "Migration and Income Redistribution Responsibilities," Journal of Human Resources, University of Wisconsin Press, vol. 19(4), pages 489-511.
    10. Blank, Rebecca M., 1988. "The effect of welfare and wage levels on the location decisions of female-headed households," Journal of Urban Economics, Elsevier, vol. 24(2), pages 186-211, September.
    11. Razin, Assaf & Sadka, Efraim & Swagel, Phillip, 1998. "Tax Burden and Migration," Economics Series 59, Institute for Advanced Studies.
    12. De Giorgi, Giacomo & Pellizzari, Michele, 2009. "Welfare migration in Europe," Labour Economics, Elsevier, vol. 16(4), pages 353-363, August.
    13. Enchautegui, Maria E, 1997. "Welfare Payments and Other Economic Determinants of Female Migration," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 529-554, July.
    14. J. R. Walker, "undated". "Migration amoung low-income households: Helping the witch doctors reach consensus," Institute for Research on Poverty Discussion Papers 1031-94, University of Wisconsin Institute for Research on Poverty.
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    More about this item

    JEL classification:

    • F0 - International Economics - - General
    • F2 - International Economics - - International Factor Movements and International Business
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H10 - Public Economics - - Structure and Scope of Government - - - General

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