Working Paper: CEPR ID: DP8672
Authors: Corrado Giulietti; Martin Guzi; Martin Kahanec; Klaus F. Zimmermann
Abstract: The paper studies the impact of unemployment benefits on immigration. A sample of 19 European countries observed over the period 1993 to 2008 is used to test the hypothesis that unemployment benefit spending (UBS) is correlated with immigration flows from EU and non-EU origins. While OLS estimates reveal the existence of a moderate correlation for non-EU immigrants only, IV and GMM techniques used to address endogeneity issues yield, respectively, a much smaller and an essentially zero causal impact of UBS on immigration. All estimates for immigrants from EU origins indicate that flows within the EU are not related to unemployment benefit generosity. This suggests that the so-called 'welfare migration' debate is misguided and not based on empirical evidence.
Keywords: European Union; Immigration; Unemployment Benefit Spending; Welfare Magnets
JEL Codes: H53; J61
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Immigration Flows from Non-EU Origins (F22) | Unemployment Benefit Spending (UBS) (J65) |
| Immigration Patterns (F22) | Unemployment Benefit Spending (UBS) (J65) |
| Unemployment Benefit Spending (UBS) (J65) | Immigration Flows from EU Countries (J61) |
| Unemployment Benefit Spending (UBS) (J65) | Immigration Flows from Non-EU Origins (F22) |
| Unemployment Benefit Spending (UBS) (J65) | Immigration Flows from Non-EU Origins (F22) |