Migration into the Welfare State: Tax and Migration Competition
This paper provides overview of recent work on migration and welfare state tax policies: 1. I survey the literature on the tax burden of migration. 2. I empirically identify the differential effect of the generosity of the welfare state on the skill composition of immigrants across the two groups (the "free-migration" group and the "policy-restricted migration" group) in an unbiased way. 3. I outline the implications of the tax burden of migration to tax competition within a union, facing migration from the rest of the world.Each host country in a competitive regime balances on the margin these gains and losses from migration. In doing so, each country takes the well-being of the migrants as given. Therefore, It ignores the fact that a tax-migration policy that admits an extra migrant raises the well-being that must be accorded to migrants by all the other host countries, in order to elicit the migrant to come in; and more capital income leaks, through capital taxation, to immigrants.
The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Assaf Razin, 2013. "MIGRATION into the WELFARE STATE: tax and migration competition," International Tax and Public Finance, Springer, vol. 20(4), pages 548-563, August. citation courtesy of