Migrant Workers and the Welfare State

46 Pages Posted: 1 Jun 2016

See all articles by Torben M. Andersen

Torben M. Andersen

University of Aarhus - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Silvia Migali

FernUniversität in Hagen

Abstract

There is wide concern that migration flows may undermine the financial viability of generous welfare arrangements. The discussion focuses on welfare arrangements as attractors of migrants, suggesting that the issue does not pertain to migrant workers. However, this overlooks how welfare arrangements affect return-migration in case of social events like job loss. Importantly, migrants are shown to be self-selected in a way affecting both migration and return-migration. Two migration regimes prevail. In one, with relatively low benefits, unemployed workers return, while in the other some stay. Importantly, the stay or return migration decision is more sensitive to welfare generosity than the migration decision.

Keywords: migrant workers, return-migration, job-loss, unemployment benefits

JEL Classification: F22, J68, I31

Suggested Citation

Andersen, Torben M. and Migali, Silvia, Migrant Workers and the Welfare State. IZA Discussion Paper No. 9940, Available at SSRN: https://ssrn.com/abstract=2786024

Torben M. Andersen (Contact Author)

University of Aarhus - Department of Economics ( email )

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CESifo (Center for Economic Studies and Ifo Institute)

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Centre for Economic Policy Research (CEPR)

London
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IZA Institute of Labor Economics

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Bonn, D-53072
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Silvia Migali

FernUniversität in Hagen ( email )

Universitätsstrasse 41
Feithstrathe 140
Hagen, 58084
Germany

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