Working Paper: NBER ID: w17515
Authors: Assaf Razin; Jackline Wahba
Abstract: This paper revisits the magnet hypothesis and investigates the impact of the welfare generosity on the difference between skilled and unskilled migration rates. The main purpose of the paper is to assess the role of mobility restriction on shaping the effect of the welfare state genrosity. In a free migration regime, the impact is expected to be negative on the skill composition of migrants while in a restricted mobility regime, the impact will be the opposite, as voters will prefer selective migration policies, favoring skilled migrants who tend to be net contributors to the fiscal system. We utilize the free labor movement within EUR (the EU, Norway and Switzerland) and the restricted movement from outside of the EUR to compare the free migration.
Keywords: Welfare Magnet Hypothesis; Fiscal Burden; Immigration; Skill Selectivity
JEL Codes: F22; H3; J48
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Welfare state generosity (I38) | Skill composition of migrants (J61) |
| Increased welfare benefits (I38) | Skill composition of migrants (J61) |
| Welfare benefits (I38) | Skill difference in migration rates (free migration) (J61) |
| Welfare benefits (I38) | Skill difference in migration rates (restricted migration) (J61) |