Download This PaperThe Skill Composition of Migration and the Generosity of the Welfare State
21 Pages Posted: 21 Feb 2009 Last revised: 1 Mar 2024
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The Skill Composition of Migration and the Generosity of the Welfare State
The Skill Composition of Migration and the Generosity of the Welfare State
Date Written: February 2009
Abstract
Skilled migrants typically contribute to the welfare state more than they draw in benefits from it. The opposite holds for unskilled migrants. This suggests that a host country is likely to boost (respectively, curtail) its welfare system when absorbing high-skill (respectively, low-skill) migration. In this paper we first examine this hypothesis in a politico-economic setup. We then confront the prediction of the theory with evidence. In doing so, we reckon with an endogeneity problem that arise because the skill composition of migration is itself affected by the generosity of the welfare state.
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CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
HOME PAGE: http://www.CESifo.de
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
HOME PAGE: http://www.CESifo.de
IZA Institute of Labor Economics
P.O. Box 7240
Bonn, D-53072
Germany
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