Welfare Migration: Is the Net Fiscal Burden a Good Measure of its Economics Impact on the Welfare of the Native-Born Population?

CESifo Group Munich, CESifo Working Paper Series 01/2004;
Source: RePEc

ABSTRACT This paper shows that increases in the minimum wage rate can have ambiguous effects on the working hours and welfare of employed workers in competitive labor markets. The reason is that employers may not comply with the minimum wage legislation and instead pay a lower subminimum wage rate. If workers are risk neutral, we prove that working hours and welfare are invariant to the minimum wage rate. If workers are risk averse and imprudent (which is the empirically likely case), then working hours decrease with the minimum wage rate, while their welfare may increase.

  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: The generosity of the welfare state serves as a magnet to unskilled migrants, and as a deterrent to skilled migrants, if migration is free. However, …scal burden of immigrants inuences immigration policies so that the skill composition of immigrants is tilted towards immi-grants who are more productive. The paper tests the di¤erent e¤ects of the generosity of the welfare state under free migration and un-der policy-controlled migration and distinguish between this e¤ect for developing versus developed countries.
  • Source
  • Source
    Article: Diasporas
    [Show abstract] [Hide abstract]
    ABSTRACT: Migration flows are shaped by a complex combination of self-selection and out-selection mechanisms. In this paper, the authors analyze how existing diasporas (the stock of people born in a country and living in another one) affect the size and human-capital structure of current migration flows. The analysis exploits a bilateral data set on international migration by educational attainment from 195 countries to 30 developed countries in 1990 and 2000. Based on simple micro-foundations and controlling for various determinants of migration, the analysis finds that diasporas increase migration flows, lower the average educational level and lead to higher concentration of low-skill migrants. Interestingly, diasporas explain the majority of the variability of migration flows and selection. This suggests that, without changing the generosity of family reunion programs, education-based selection rules are likely to have a moderate impact. The results are highly robust to the econometric techniques, accounting for the large proportion of zeros and endogeneity problems.
    Cultural Anthropology 10/2009; 9(3):302 - 338. DOI:10.1525/can.1994.9.3.02a00040 · 2.95 Impact Factor

Full-text (3 Sources)

Available from
May 16, 2014