Income Redistribution and Self-Selection of Immigrants

Abstract

We analyze the effects of governmental redistribution of income on migration patterns, using an Italian administrative dataset that includes information on almost every Italian citizen living abroad. Since Italy takes a middle ground in terms of redistribution, both the welfare-magnet effect from more redistributive countries and the propensity of the high-skilled to settle in countries with lower taxes can be empirically studied. Our findings confirm the hypothesis that destination countries with more redistribution receive a negative selection of Italian migrants. This holds true after accounting for many individual and country level covariates, migration costs, and when testing for stochastic dominance of the skill distributions of migrants and stayers. Policy simulations are run in order to gauge the magnitude of these migration effects. Based on estimated elasticities, we find that sizable increases in the amount of redistribution in Italy have small effects on the skill composition of the resident population.

Migrants and Welfare States

“…There are previous studies suggesting that generous benefits attract migrants (e.g. Borjas, 1999;Corneo and Neidhöfer, 2021). Borjas (1999) more specifically finds that migrants who receive welfare are overrepresented in the American states with the most generous benefits.…”

Intergenerational mobility and self-selection on unobserved skills: New evidence

“…Neidhöfer et al (2018) show that in most Latin American countries educational mobility has risen substantially for people born in the eighties in comparison to their parents and grandparents.5 Borjas et al (2019) use the residuals from earnings regressions to measure the self-selection on unobservable characteristics of Danish emigrants Corneo and Neidhöfer (2019). measure the unobserved skill level of Italian migrants worldwide, via the probability an individual is either unemployed, or has a high occupational position in the destination country, given their level of education.…”

Intergenerational Mobility and Self-Selection of Asylum Seekers in Germany

“…Neidhöfer et al (2018) show that in most Latin American countries educational mobility has been rising substantially for people born in the eighties in comparison to their parents and grandparents.4 Borjas et al (2019) use the residuals from earnings regressions to measure the self-selection on unobservable characteristics of Danish emigrants Corneo and Neidhöfer (2019). measure the unobserved skill level of Italian migrants worldwide, via the probability an individual is either unemployed, or has a high occupational position in the destination country, given their level of education.…”