Unemployment benefits and immigration: evidence from the EU

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author.IZA Discussion Paper No. 6075 October 2011 ABSTRACT Unemployment Benefits and Immigration: Evidence from the EUThe paper studies the impact of unemployment benefits on immigration. A sample of 19 European countries observed over the period 1993-2008 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.JEL Classification: H53, J61

Labor Market Laws and Intra-European Migration: The Role of the State in Shaping Destination Choices

“…The relationship for destination state social welfare spending, on the other hand, is negative, and the relationship for origin state per capita GDP is positive, both of which run counter to theoretical expectations. However, the welfare result is less surprising given the findings of Giulietti et al (2013), Pedersen, Pytlikova, and Smith (2008), , and Massey and Espinosa (1997) that there is little evidence of immigrants being drawn more to destination states with generous social welfare benefits, and also given the likelihood that welfare spending is correlated with various omitted variables that may be driving the sign of the coefficient. The GDP result may reflect the classic "immigration hump" that many countries go through as their economies develop (Massey et al, 2002).…”

Back to Articles The welfare magnet hypothesis and the welfare take-up of migrants

“…An essentially null effect also emerges when looking at spending on unemployment benefits as a percentage of GDP [7]. Data from 19 EU countries for the period 1998-2008 show a small positive association between spending on unemployment benefits and immigration flows for immigrants from non-EU origins (see Figure 2).…”

EU Migration and the Economic Crisis: Concepts and Issues

“…7 and 10 ) and as "unreasonable burdens" on their public fi nances. In spite of their existence for several decades, the resurgence of the concepts of "welfare magnets" or "welfare shoppers" to delegitimize immigrants' access to social protection is, however, not surprising in a context of crisis when states are looking at ways to decrease public spending (Böhning 1972 ;Borjas 1998 ;Schierup et al 2006 ;De Giorgi and Pellizzari 2009 ;Giulietti et al 2013 ).…”