Does welfare drive international migration? – a European experience

Purpose - The purpose of this paper is to provide a summary of empirical research on welfare magnetism and to assess the size and scope of the welfare magnet effect on the non-EU migrants in selected immigration countries of the European Union. Design/methodology/approach - A conditional logistic regression model with interactions is used to estimate the strength of the welfare magnet effect, while controlling for demographic characteristics of the migrants and country-specific economic indicators. Data, used for estimation, comes from the Immigrant Citizen Survey, which provides a large, representative sample of first-generation (i.e. non-EU born) migrants. Various measures of welfare generosity are tested to assure the robustness of the results. Findings - The coefficients suggest that the welfare magnet effect is present and significant in some immigrant groups, although it can have a negative impact on location decisions in other cases. Similar results are obtained for wage and unemployment indicators. Research limitations/implications - Results corroborate the welfare magnet hypothesis, which states that more generous welfare states should expect greater clustering of negatively-selected (i.e. lower educated) migrants. One potential limitation comes from the sample size, which does not allow for more general conclusions. Practical implications - Heterogeneous effects of basic economic indicators in different demographic groups show that aggregate immigrant flows, used widely in the literature, can provide biased estimates of welfare magnet effect. Originality/value - This paper adds to the available literature by using representative, recently collected data and employing a more complete list of controls in a quantitative analysis of migration decisions.