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Migration State and Welfare State: Competition vs. Coordination in an Economic Union

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  • Assaf Razin
  • Efraim Sadka

Abstract

We develop a political-economy model of economic union and compare the competion regime to the coordination regime. Key policy differences emerge between the two regimes: concerning the generosity of the welfare state and the skill composition of migration. We argue that the differences between the U.S. and the EU - the degree of coordination among the member states - contribute to the observed policy differences, as the model predicts.

Suggested Citation

  • Assaf Razin & Efraim Sadka, 2015. "Migration State and Welfare State: Competition vs. Coordination in an Economic Union," NBER Working Papers 21606, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21606
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    References listed on IDEAS

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    1. Boeri, Tito & Hanson, Gordon H. & McCormick, Barry (ed.), 2002. "Immigration Policy and the Welfare System: A Report for the Fondazione Rodolfo Debenedetti," OUP Catalogue, Oxford University Press, number 9780199256310.
    2. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64(5), pages 416-416.
    3. Tito Boeri, 2010. "Immigration to the Land of Redistribution," Economica, London School of Economics and Political Science, vol. 77(308), pages 651-687, October.
    4. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
    5. Rebecca M. Blank, 1997. "Policy Watch: The 1996 Welfare Reform," Journal of Economic Perspectives, American Economic Association, vol. 11(1), pages 169-177, Winter.
    6. Thomas J. Sargent, 2012. "Nobel Lecture: United States Then, Europe Now," Journal of Political Economy, University of Chicago Press, vol. 120(1), pages 1-40.
    7. Tito Boeri, 2008. "Brain Gain: A European Approach, Introduction by Tito Boeri," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(03), pages 30-34, October.
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    More about this item

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • H1 - Public Economics - - Structure and Scope of Government

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