Welfare Magnet Hypothesis, Fiscal Burden, and Immigration Skill Selectivity

Assaf Razin and Jackline Wahba

Scandinavian Journal of Economics, 2015, vol. 117, issue 2, 369-402

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.

Date: 2015
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Related works:
Working Paper: Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity (2012)
Working Paper: Free vs. Controlled Migration: Bilateral Country Study (2011)
Working Paper: Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity (2011)
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