Working Paper: CEPR ID: DP10127
Authors: Assaf Razin; Efraim Sadka
Abstract: Over the years, there emerged two key policy differences between Europe and America, both welfare and migration-states. The former has more generous welfare state and more liberal migration policies than the latter. In this paper we attempt to provide a political-economy explanation for these key differences, based on the degree of coordination among member states of the economic union, and the different levels of population aging.
Keywords: Fiscal and migration competition; Fiscal and migration coordination
JEL Codes: F22; H23; J11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Generous welfare state in Europe (P16) | Higher influx of low-skill migrants (F66) |
| Aging populations in Europe (J11) | Support for high-skill migration (J61) |
| Older populations (J11) | Support for high-skill migration (J61) |
| Younger voters (K16) | Oppose generous welfare policies (H53) |
| Political balance of power shifts (D72) | Influences migration policies (F22) |