IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Welfare Magnets, Taxation and the Location Decisions of Migrants to the EU

  • Klaus Nowotny

    ()

Migrants are among the groups most vulnerable to economic fluctuations. As predicted by the 'welfare magnet' hypothesis, migrants can therefore be expected to--ceteris paribus--prefer countries with more generous welfare provisions to insure themselves against labor market risks. This paper analyzes the role of the welfare magnet hypothesis for migrants to the EU-15 at the regional level. The empirical analysis based on a random parameters logit model shows that the regional location decisions of migrants are mostly governed by income opportunities, labor market conditions, ethnic networks and a common language. There is no strong evidence for the welfare magnet hypothesis in the EU, but the empirical model shows that the design of the (income) tax system has a large and consistent effect on locational choice.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa11/e110830aFinal00132.pdf
Download Restriction: no

Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa11p133.

as
in new window

Length:
Date of creation: Sep 2011
Date of revision:
Handle: RePEc:wiw:wiwrsa:ersa11p133
Contact details of provider: Postal:
Welthandelsplatz 1, 1020 Vienna, Austria

Web page: http://www.ersa.org

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Amelie Constant & Elena D'Agosto, 2008. "Where Do the Brainy Italians Go?," Discussion Papers of DIW Berlin 763, DIW Berlin, German Institute for Economic Research.
    • Amelie F. Constant & Elena D’Agosto, 2010. "Where Do the Brainy Italians Go?," AIEL Series in Labour Economics, in: Floro Ernesto Caroleo & Francesco Pastore (ed.), The Labour Market Impact of the EU Enlargement. A New Regional Geography of Europe?, edition 1, chapter 10, pages 247-271 AIEL - Associazione Italiana Economisti del Lavoro.
  2. Dominique M. Gross & Nicolas Schmitt, 2003. "The Role of Cultural Clustering in Attracting New Immigrants," Journal of Regional Science, Wiley Blackwell, vol. 43(2), pages 295-318.
  3. Chiswick, Barry R. & Miller, Paul W., 2002. "Do Enclaves Matter in Immigrant Adjustment?," IZA Discussion Papers 449, Institute for the Study of Labor (IZA).
  4. Cobb-Clark, Deborah A, 1993. "Immigrant Selectivity and Wages: The Evidence for Women," American Economic Review, American Economic Association, vol. 83(4), pages 986-93, September.
  5. Bartel, Ann P, 1989. "Where Do the New U.S. Immigrants Live?," Journal of Labor Economics, University of Chicago Press, vol. 7(4), pages 371-91, October.
  6. Chiswick, Barry R. & Miller, Paul W., 2007. "The International Transferability of Immigrants’ Human Capital Skills," IZA Discussion Papers 2670, Institute for the Study of Labor (IZA).
  7. George J. Borjas, 1998. "Immigration and Welfare Magnets," NBER Working Papers 6813, National Bureau of Economic Research, Inc.
  8. David A. Jaeger, 2006. "Green Cards and the Location Choices of Immigrants in the United States, 1971-2000," Working Papers 29, Department of Economics, College of William and Mary.
  9. Peter Egger & Doina Maria Radulescu, 2009. "The Influence of Labour Taxes on the Migration of Skilled Workers," The World Economy, Wiley Blackwell, vol. 32(9), pages 1365-1379, 09.
  10. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2.
  11. Axel Heitmueller, 2006. "Coordination Failures In Network Migration," Manchester School, University of Manchester, vol. 74(6), pages 701-710, December.
  12. Heiko Steffens, 2010. "OECD. (2009). Promoting Consumer Education—Trends, Policies and Good Practices. Paris: Organisation for Economic Co-operation and Development. ISBN 978-92-64-06008-1. 189 pp., 30.00 EUR," Journal of Consumer Policy, Springer, vol. 33(3), pages 291-292, September.
  13. Epstein, Gil S., 2002. "Informational Cascades and Decision to Migrate," IZA Discussion Papers 445, Institute for the Study of Labor (IZA).
  14. David Hensher, 2001. "The valuation of commuter travel time savings for car drivers: evaluating alternative model specifications," Transportation, Springer, vol. 28(2), pages 101-118, May.
  15. Burda, Michael C, 1993. "The Determinants of East-West German Migration: Some First Results," CEPR Discussion Papers 764, C.E.P.R. Discussion Papers.
  16. Arne Risa Hole, 2007. "Fitting mixed logit models by using maximum simulated likelihood," Stata Journal, StataCorp LP, vol. 7(3), pages 388-401, September.
  17. Howard J. Wall, 2001. "articles: Voting with your feet in the United Kingdom: Using cross-migration rates to estimate relative living standards," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(1), pages 1-23.
  18. Bauer, Thomas K. & Epstein, Gil S. & Gang, Ira N., 2000. "What are Migration Networks?," IZA Discussion Papers 200, Institute for the Study of Labor (IZA).
  19. Tim Green & L. Alan Winters, 2010. "Economic Crises and Migration: Learning from the Past and the Present," The World Economy, Wiley Blackwell, vol. 33(9), pages 1053-1072, 09.
  20. Anna Piil Damm, 2005. "Determinants of Recent Immigrants’ Location Choices: Quasi-Experimental Evidence," CAM Working Papers 2005-17, University of Copenhagen. Department of Economics. Centre for Applied Microeconometrics.
  21. Edin, Per-Anders & Fredriksson, Peter & Åslund, Olof, 2000. "Ethnic Enclaves and the Economic Success of Immigrants - Evidence from a Natural Experiment," Working Paper Series 2000:21, Uppsala University, Department of Economics.
  22. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
  23. Thomas Bauer & Gil Epstein & Ira Gang, 2005. "Enclaves, language, and the location choice of migrants," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(4), pages 649-662, November.
  24. Cappellari, Lorenzo & Jenkins, Stephen P., 2006. "Calculation of Multivariate Normal Probabilities by Simulation, with Applications to Maximum Simulated Likelihood Estimation," IZA Discussion Papers 2112, Institute for the Study of Labor (IZA).
  25. , 2008. "The Joint Choice Of An Individual'S Occupation And Destination," Journal of Regional Science, Wiley Blackwell, vol. 48(5), pages 893-919.
  26. Bauer, Thomas K. & Epstein, Gil S. & Gang, Ira N., 2002. "Herd Effects or Migration Networks? The Location Choice of Mexican Immigrants in the U.S," IZA Discussion Papers 551, Institute for the Study of Labor (IZA).
  27. David McKenzie & Hillel Rapoport, 2010. "Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks," The Review of Economics and Statistics, MIT Press, vol. 92(4), pages 811-821, November.
  28. Wido Geis & Silke Uebelmesser & Martin Werding, 2008. "How do Migrants Choose their Destination Country? An Analysis of Institutional Determinants," CESifo Working Paper Series 2506, CESifo Group Munich.
  29. Klaus Nowotny & Dieter Pennerstorfer, 2011. "Ethnic Networks and the Location Choice of Migrants in Europe," WIFO Working Papers 415, WIFO.
  30. D. McFadden & J. Hausman, 1981. "Specification Tests for the Multinominal Logit Model," Working papers 292, Massachusetts Institute of Technology (MIT), Department of Economics.
  31. Yashiv, Eran, 2003. "Self-Selection of Migrant Workers: Migration Premium and (no) Returns to Skills," CEPR Discussion Papers 4156, C.E.P.R. Discussion Papers.
  32. Phillip B. Levine & David J. Zimmerman, 1995. "An Empirical Analysis of the Welfare Magnet Debate Using the NLSY," NBER Working Papers 5264, National Bureau of Economic Research, Inc.
  33. Madeline Zavodny, 1998. "Determinants of recent immigrants' locational choices," FRB Atlanta Working Paper 98-3, Federal Reserve Bank of Atlanta.
  34. Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August.
  35. Carrington, William J & Detragiache, Enrica & Vishwanath, Tara, 1996. "Migration with Endogenous Moving Costs," American Economic Review, American Economic Association, vol. 86(4), pages 909-30, September.
  36. Thomas Liebig & Alfonso Sousa-Poza, 2004. "Migration, Self-Selection and Income Inequality: An International Analysis," Kyklos, Wiley Blackwell, vol. 57(1), pages 125-146, 02.
  37. Jeffrey Grogger & Gordon H. Hanson, 2008. "Income Maximization and the Selection and Sorting of International Migrants," NBER Working Papers 13821, National Bureau of Economic Research, Inc.
  38. Andersson Joona, Pernilla & Wadensjö, Eskil, 2007. "The Employees of Native and Immigrant Self-Employed," IZA Discussion Papers 3147, Institute for the Study of Labor (IZA).
  39. Robert A. Nakosteen & Olle Westerlund & Michael Zimmer, 2008. "Migration And Self-Selection: Measured Earnings And Latent Characteristics," Journal of Regional Science, Wiley Blackwell, vol. 48(4), pages 769-788.
  40. C. Simon Fan & Oded Stark, 2007. "A Social Proximity Explanation of the Reluctance to Assimilate," Kyklos, Wiley Blackwell, vol. 60(1), pages 55-63, 02.
  41. Molho, Ian, 1986. "Theories of Migration: A Review," Scottish Journal of Political Economy, Scottish Economic Society, vol. 33(4), pages 396-419, November.
  42. Bosch, Darrell, 2002. "Organisation for Economic Co-operation and Development, Income Risk Management in Agriculture: OECD, Paris, France, December 2000, 152 pp., US$ 42.00, Softcover, ISBN 92-64-18534-8," Agricultural Economics, Blackwell, vol. 27(1), pages 88-90, May.
  43. Paul S. Davies & Michael J. Greenwood & Haizheng Li, 2001. "A Conditional Logit Approach to U.S. State-to-State Migration," Journal of Regional Science, Wiley Blackwell, vol. 41(2), pages 337-360.
  44. Miranda, Alfonso, 2007. "Migrant Networks, Migrant Selection, and High School Graduation in Mexico," IZA Discussion Papers 3204, Institute for the Study of Labor (IZA).
  45. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
  46. Paul D. Gottlieb & George Joseph, 2006. "College-To-Work Migration Of Technology Graduates And Holders Of Doctorates Within The United States," Journal of Regional Science, Wiley Blackwell, vol. 46(4), pages 627-659.
  47. Gary L. Hunt & Richard E. Mueller, 2004. "North American Migration: Returns to Skill, Border Effects, and Mobility Costs," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 988-1007, November.
  48. Lars Nerdrum & Bo Sarpebakken, 2006. "Mobility of foreign researchers in Norway," Science and Public Policy, Oxford University Press, vol. 33(3), pages 217-229, April.
  49. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
  50. Anna Piil Damm, 2009. "Ethnic Enclaves and Immigrant Labor Market Outcomes: Quasi-Experimental Evidence," Journal of Labor Economics, University of Chicago Press, vol. 27(2), pages 281-314, 04.
  51. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
  52. Kaivan Munshi, 2003. "Networks in the Modern Economy: Mexican Migrants in the U. S. Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 118(2), pages 549-599.
  53. Bratsberg, Bernt, 1995. "The incidence of non-return among foreign students in the United States," Economics of Education Review, Elsevier, vol. 14(4), pages 373-384, December.
  54. Krupka, Douglas J., 2007. "Location-Specific Human Capital, Location Choice and Amenity Demand," IZA Discussion Papers 2987, Institute for the Study of Labor (IZA).
  55. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S95-S126, December.
  56. Julian Ramajo & Montserrat Ferre, 2010. "Purchasing power parity revisited: evidence from old and new tests for an organisation for economic co-operation and development panel," Applied Economics, Taylor & Francis Journals, vol. 42(17), pages 2243-2260.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa11p133. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gunther Maier)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.