NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Migration State and Welfare State: Competition vs. Coordination in an Economic Union

Assaf Razin, Efraim Sadka

NBER Working Paper No. 21606
Issued in October 2015
NBER Program(s):International Finance and Macroeconomics, Development of the American Economy

We develop a political-economy model of economic union and compare the competion regime to the coordination regime. Key policy differences emerge between the two regimes: concerning the generosity of the welfare state and the skill composition of migration. We argue that the differences between the U.S. and the EU - the degree of coordination among the member states - contribute to the observed policy differences, as the model predicts.

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Document Object Identifier (DOI): 10.3386/w21606

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