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Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity

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  • Assaf Razin
  • Jackline Wahba

Abstract

This paper revisits the magnet hypothesis and investigates the impact of the welfare generosity on the difference between skilled and unskilled migration rates. The main purpose of the paper is to assess the role of mobility restriction on shaping the effect of the welfare state genrosity. In a free migration regime, the impact is expected to be negative on the skill composition of migrants while in a restricted mobility regime, the impact will be the opposite, as voters will prefer selective migration policies, favoring skilled migrants who tend to be net contributors to the fiscal system. We utilize the free labor movement within EUR (the EU, Norway and Switzerland) and the restricted movement from outside of the EUR to compare the free migration.

Suggested Citation

  • Assaf Razin & Jackline Wahba, 2011. "Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity," NBER Working Papers 17515, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:17515
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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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