Unskilled Migration: A Burden or a Boon for the Welfare State

Assaf Razin and Efraim Sadka

No 275637, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: Being relatively low earners, migrants are net beneficiaries of the welfare state. Therefore, in a static setup migration may be resisted by the entire native-born population. However, it is shown that in a dynamic setup with a pension system which is an important pillar of any welfare state, migration is,beneficial to all income (high and low) and age (old and young) groups when the economy has a good access to international capital markets. The pro-migration feature of the dynamic model is weakened and possibly overturned when the economy does not have good access to the world capital markets. In this case, to the extent that factor prices are significantly affected by migration because of low substitution between labor and capital, low-skill native born and possibly also high-skill native born may lose.

Keywords: Financial Economics; International Relations/Trade (search for similar items in EconPapers)
Pages: 29
Date: 1999-02
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Citations: View citations in EconPapers (14)

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Related works:
Journal Article: Unskilled Migration: A Burden or a Boon for the Welfare State? (2000)
Working Paper: Unskilled Migration: a Burden or a Boon for the Welfare State? (1999)
Working Paper: Unskilled Migration: A Burden or a Boon for the Welfare State (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275637

DOI: 10.22004/ag.econ.275637

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