The skill composition of migration and the generosity of the welfare state / Alon Cohen, Assaf Razin, Efraim Sadka.

By: Cohen, AlonContributor(s): Razin, Assaf | Sadka, Efraim | National Bureau of Economic ResearchMaterial type: TextTextSeries: Working paper series (National Bureau of Economic Research) ; no. 14738.Publication details: Cambridge, Mass. : National Bureau of Economic Research, 2009Description: 20 p. : ill. ; 22 cmSubject(s): Emigration and immigration -- Economic aspects | Public welfare -- Econometric models | Labor marketLOC classification: HB1 | .N38 no. 14738Online resources: Click here to access online Summary: Skilled migrants typically contribute to the welfare state more than they draw in benefits from it. The opposite holds for unskilled migrants. This suggests that a host country is likely to boost (respectively, curtail) its welfare system when absorbing high-skill (respectively, low-skill) migration. In this paper we first examine this hypothesis in a politico-economic setup. We then confront the prediction of the theory with evidence. In doing so, we reckon with an endogeneity problem that arise because the skill composition of migration is itself affected by the generosity of the welfare state.
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Research Papers HB1.N38 no. 14738 (Browse shelf (Opens below)) 1 Available 0013125601

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Skilled migrants typically contribute to the welfare state more than they draw in benefits from it. The opposite holds for unskilled migrants. This suggests that a host country is likely to boost (respectively, curtail) its welfare system when absorbing high-skill (respectively, low-skill) migration. In this paper we first examine this hypothesis in a politico-economic setup. We then confront the prediction of the theory with evidence. In doing so, we reckon with an endogeneity problem that arise because the skill composition of migration is itself affected by the generosity of the welfare state.

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