NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Ole Agersnap

Department of Economics
Princeton University
Princeton, NJ 08544

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: Princeton University

NBER Working Papers and Publications

November 2019The Welfare Magnet Hypothesis: Evidence From an Immigrant Welfare Scheme in Denmark
with Amalie Sofie Jensen, Henrik Kleven: w26454
We study the effects of welfare generosity on international migration using reforms of immigrant welfare benefits in Denmark. The first reform, implemented in 2002, lowered benefits for non-EU immigrants by about 50%, with no changes for natives or EU immigrants. The policy was later repealed and re-introduced. Based on a quasi-experimental research design, we find sizeable effects: the benefit reduction reduced the net flow of immigrants by about 5,000 people per year, and the subsequent repeal of the policy reversed the effect almost exactly. The implied elasticity of migration with respect to benefits equals 1.3. This represents some of the first causal evidence on the welfare magnet hypothesis.
 
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