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Migration and Social Insurance

Helmuth Cremer () and Catarina Goulão ()

No 3478, CESifo Working Paper Series from CESifo

Abstract: A wide variety of social protection systems coexist within the EU. Some member states provide social insurance that is of Beveridgean inspiration (with universal and more or less flat benefits), while others offer a system that is mainly Bismarckian (with benefits related to past contributions). Labor mobility raises concerns about the sustainability of the most generous and redistributive (Beveridgean) insurance systems. We address this issue in a two-country setting, where individuals differ in mobility cost (attachment to their native country). A Bismarckian insurance system is not affected by migration while a Beveridgean one is. Our results suggest that the race-to-the-bottom affecting tax rates may be more important under Beveridge-Beveridge competition than under Beveridge-Bismarck competition. Finally, we study the strategic choice of the type of social protection. We show that Bismarckian governments may find it beneficial to adopt a Beveridgean insurance system.

Keywords: social insurance; tax competition; mobility; economic integration (search for similar items in EconPapers)
JEL-codes: H23 H70 (search for similar items in EconPapers)
Date: 2011
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Related works:
Journal Article: Migration and Social Insurance (2014) Downloads
Working Paper: Migration and Social Insurance (2014) Downloads
Working Paper: Migration and Social Insurance (2011) Downloads
Working Paper: Migration and Social Insurance (2011) Downloads
Working Paper: Migration and social insurance (2010) Downloads
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