Migration and the Welfare State: Dynamic Political-Economy Theory

Assaf Razin, Efraim Sadka and Benjarong Suwankiri

No 2991, CESifo Working Paper Series from CESifo

Abstract: We model an overlapping-generations economy with two skill levels: skilled and unskilled. The welfare-state is modeled simply by a proportional tax on labor income to finance a demogrant in a balanced-budget manner. Therefore, some (the unskilled workers and old retirees) are net beneficiaries from the welfare state and others (the skilled workers) are net contributors to it. Migration policies are set to determine the total migration volume and its skill composition.We characterize subgame-perfect Markov political-economic equilibria consisting of the tax rate (which determines the demogrant), skill composition and the total number of migrants. We distinguish between two voting behaviors: sincere and strategic voting.

JEL-codes: F13 F20 H00 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Migration and the Welfare State: Dynamic Political-Economy Theory (2010)
Working Paper: Migration and the welfare state: Dynamic Political-Economy Theory (2009)
Working Paper: Migration and the Welfare State: A Dynamic Political-Economy Theory (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2991

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