The Welfare Magnet Hypothesis: Evidence From an Immigrant Welfare Scheme in Denmark

Ole Agersnap, Amalie Sofie Jensen and Henrik Kleven

No 26454, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the effects of welfare generosity on international migration using reforms of immigrant welfare benefits in Denmark. The first reform, implemented in 2002, lowered benefits for non-EU immigrants by about 50%, with no changes for natives or EU immigrants. The policy was later repealed and re-introduced. Based on a quasi-experimental research design, we find sizeable effects: the benefit reduction reduced the net flow of immigrants by about 5,000 people per year, and the subsequent repeal of the policy reversed the effect almost exactly. The implied elasticity of migration with respect to benefits equals 1.3. This represents some of the first causal evidence on the welfare magnet hypothesis.

JEL-codes: H20 H31 J61 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-eur, nep-lab, nep-mig, nep-pbe and nep-ure
Note: LS PE
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Citations: View citations in EconPapers (16)

Published as Ole Agersnap & Amalie Jensen & Henrik Kleven, 2020. "The Welfare Magnet Hypothesis: Evidence from an Immigrant Welfare Scheme in Denmark," American Economic Review: Insights, vol 2(4), pages 527-542.

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