Free vs. Restricted Immigration: Bilateral Country Study

Assaf Razin and Jackline Wahba

No 5546, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper tests the differential effects of the generosity of the welfare state under free migration and under policy-controlled migration, distinguishing between source developing and developed countries. We utilize free-movement within the EU to examine the free migration regime and compare that to immigration into the EU from two other groups, developed and developing source countries, to capture immigration-restricted regimes. We standardize cross-country education quality differences by using the Hanushek-Woessmann (2009) cognitive skills measure. We find strong support for the "magnet hypothesis" under the free-migration regime, and the "fiscal burden hypothesis" under the immigration-restricted regime even after controlling for differences in returns to skills in source and host countries.

Keywords: migration; welfare state; EU (search for similar items in EconPapers)
JEL-codes: J48 J61 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2011-03
New Economics Papers: this item is included in nep-eur and nep-mig
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published - revised version published as 'Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity' in: Journal of Scandinavian Economics, 2015, 177 (2), 369 - 402

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