The welfare state, an impediment to integration?

Uwe Walz () and Dietmar Wellisch

No 119, Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics

Abstract: We investigate the consequences of redistribution policy on migration and trade in a Standard two-good Heckscher-Ohlin framework. With free trade and factor price equalization, abolishing migration barriers is redundant. With the introduction of government activity, matters change drastically. Redistributive policies create an incentive to migrate in the country providing higher transfers. We show that in such a world, free migration increases the bürden of the welfare program in the rieh country and causes suboptimal national redistribution policies in both countries. It is definitively in the interest of the rieh country to stop short of a relaxation of migration barriers. Rather, a pure free trade regime without migration proves to be preferable.

Keywords: Trade; Migration; Integration; Redistribution Policy (search for similar items in EconPapers)
JEL-codes: F11 F15 F22 H55 (search for similar items in EconPapers)
Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/104836/1/tdb119.pdf (application/pdf)

Related works:
Journal Article: The Welfare State, an Impediment to Integration? (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:tuedps:119

Access Statistics for this paper

More papers in Tübinger Diskussionsbeiträge from University of Tübingen, School of Business and Economics Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().