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Skill Composition of Migration and the Generosity of the Welfare State: Free vs. Policy-Controlled Migration

6th May 2010 4pm, University of Southampton, 58/1009

Assaf Razin, Cornell University/Tel Aviv University

he paper analyzes the effect of the welfare state generosity on the skill composition of migrants across free and policy controlled migration regimes. We develop a parsimonious model in which the effect of an increase in the generosity of the welfare state on the skill composition of migrants under free migration is negative. On the other hand, however, the model predicts positive sorting of migrants if migration is controlled by policymakers in the host country. We examine this hypothesis using migration data in the EU, separated by their origin into EU and non-EU countries. Such separation conforms to free and policy-controlled migration regimes, respectively.