Unemployment Benefits and Immigration: Evidence from the EU

19 Pages Posted: 13 Nov 2011

See all articles by Corrado Giulietti

Corrado Giulietti

Department of Economics

Martin Guzi

Masaryk University; Central European Labour Studies Institute (CELSI); IZA Institute of Labor Economics

Martin Kahanec

IZA Institute of Labor Economics; Central European University; Central European Labour Studies Institute

Klaus F. Zimmermann

Harvard University; German Institute for Economic Research (DIW Berlin); University of Bonn; Centre for Economic Policy Research (CEPR)

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Abstract

The paper studies the impact of unemployment benefits on immigration. A sample of 19 European countries observed over the period 1993-2008 is used to test the hypothesis that unemployment benefit spending (UBS) is correlated with immigration flows from EU and non-EU origins. While OLS estimates reveal the existence of a moderate correlation for non-EU immigrants only, IV and GMM techniques used to address endogeneity issues yield, respectively, a much smaller and an essentially zero causal impact of UBS on immigration. All estimates for immigrants from EU origins indicate that flows within the EU are not related to unemployment benefit generosity. This suggests that the so-called "welfare migration" debate is misguided and not based on empirical evidence.

Keywords: immigration, unemployment benefit spending, welfare magnets, European Union

JEL Classification: H53, J61

Suggested Citation

Giulietti, Corrado and Guzi, Martin and Kahanec, Martin and Zimmermann, Klaus F., Unemployment Benefits and Immigration: Evidence from the EU. IZA Discussion Paper No. 6075. Available at SSRN: https://ssrn.com/abstract=1958730

Corrado Giulietti (Contact Author)

Department of Economics ( email )

University Rd.
Southampton SO17 1BJ, Hampshire SO17 1LP
United Kingdom

Martin Guzi

Masaryk University ( email )

Lipova 41a
Brno, 60200
Czech Republic
+420549496766 (Phone)

HOME PAGE: http://www.muni.cz/econ/people/233611

Central European Labour Studies Institute (CELSI)

Zvolenská 29
Bratislava, 82109
Slovakia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

HOME PAGE: http://legacy.iza.org/en/webcontent/personnel/photos/index_html?key=5347

Martin Kahanec

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Central European University ( email )

Nador utca 9
Budapest, H-1051
Hungary

Central European Labour Studies Institute ( email )

Zvolenská 29
Bratislava, 82109
Slovakia

HOME PAGE: http://www.celsi.sk

Klaus F. Zimmermann

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

German Institute for Economic Research (DIW Berlin)

Mohrenstraße 58
Berlin, 10117
Germany

University of Bonn

Postfach 2220
Bonn, D-53012
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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