Thursday, April 14, 2016
Ormandy East (DoubleTree by Hilton Philadelphia Center City)
We analyze whether migrants are more likely to choose destinations in which they have greater economic, social and political rights (and receive more generous benefits) as some of the recent literature on the “welfare magnet” hypothesis posits. We estimate a gravity type model of migration flows using: (1) annual data on international migration flows and foreign population stocks in 30 OECD countries from 223 countries of origin for the period 1980-2010; (2) indices of social, economic, and political rights for migrants arriving to OECD countries from every source country for the years 1965-2009; (3) data from the OECD Social Expenditure Database SOCX 1980-2010 and (4) indices on the restrictiveness of immigration policy.
Social expenditures are relevant for individuals’ migration choices only as long as they are entitled to receive them. We take into account differences in eligibility criteria by country of origin when measuring whether welfare expenditure is indeed a pull factor for immigrants. Finally to account for the potential endogenous relation of immigrant rights laws and policies, as well as the generosity of the welfare state, we use both GMM and IV estimators to check for robustness of our findings.
