Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity

Assaf Razin, Jackline Wahba

NBER Working Paper No. 17515
Issued in October 2011
NBER Program(s):   IFM

This paper revisits the magnet hypothesis and investigates the impact of the welfare generosity on the difference between skilled and unskilled migration rates. The main purpose of the paper is to assess the role of mobility restriction on shaping the effect of the welfare state genrosity. In a free migration regime, the impact is expected to be negative on the skill composition of migrants while in a restricted mobility regime, the impact will be the opposite, as voters will prefer selective migration policies, favoring skilled migrants who tend to be net contributors to the fiscal system. We utilize the free labor movement within EUR (the EU, Norway and Switzerland) and the restricted movement from outside of the EUR to compare the free migration.

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Document Object Identifier (DOI): 10.3386/w17515

Published: Assaf Razin and Jackie Wahba “Welfare Magnet Hypothesis, Fiscal Burden and Immigration Skill Selectivity,” The Scandinavian Journal of Economics special issue on “Migration and Development”, 2014.

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