Welfare Magnet Hypothesis, Fiscal Burden, and Immigration Skill Selectivity

34 Pages Posted: 26 Mar 2015

See all articles by Assaf Razin

Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Jackline Wahba

University of Southampton, Department of Economics; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 2015

Abstract

In this paper, we investigate the effect of welfare state generosity on the difference between skilled and unskilled migration rates, and the role of mobility restriction in shaping this effect. We utilize the free labor movement within the European Union plus Norway and Switzerland (EUR) and the restricted movement from outside the EUR in order to compare the free‐migration regime to the restricted‐migration regime. We find strong support for the magnet hypothesis under the free‐migration regime, and the fiscal burden hypothesis under the restricted‐migration regime, even after controlling for differences in educational quality and returns to skills in source and host countries.

Keywords: European Union, migration, migration regimes, social benefits

JEL Classification: H50, J24, J61

Suggested Citation

Razin, Assaf and Wahba, Jackline, Welfare Magnet Hypothesis, Fiscal Burden, and Immigration Skill Selectivity (April 2015). The Scandinavian Journal of Economics, Vol. 117, Issue 2, pp. 369-402, 2015. Available at SSRN: https://ssrn.com/abstract=2584761 or http://dx.doi.org/10.1111/sjoe.12092

Assaf Razin (Contact Author)

Tel Aviv University - Eitan Berglas School of Economics ( email )

P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972 3 640 7303 (Phone)
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National Bureau of Economic Research (NBER) ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Jackline Wahba

University of Southampton, Department of Economics ( email )

Southampton, SO171BJ
United Kingdom
+44 23 8059 3996 (Phone)

HOME PAGE: http://https://sites.google.com/site/jackiewahba/

IZA Institute of Labor Economics

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

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