NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Migration and the welfare state: Dynamic Political-Economy Theory

Assaf Razin, Efraim Sadka, Benjarong Suwankiri

NBER Working Paper No. 14784*
Issued in March 2009
NBER Program(s):   IFM

Milton Friedman, the Nobel-prize laureate economist, had it right: "It's just obvious that you can't have free immigration and a welfare state." That is, national welfare states can almost never coexist with the free movement of labor. This fact underscores the relevance of the analysis in this paper, which is a part of a forthcoming book on migration and the welfare state. It focuses on the demographic, and economic, fundamentals behind policy-restricted migration, and the policy-restricted generosity of the welfare state.

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