Welfare Magnets, Taxation And The Location Decisions Of Migrants To The EU

Date Added: Apr 2011
Format: PDF

Migrants are among the groups most vulnerable to economic fluctuations. As predicted by the "Welfare magnet" hypothesis, migrants can therefore be expected to - ceteris paribus - prefer countries with more generous welfare provisions to insure themselves against labor market risks. This paper analyzes the role of the welfare magnet hypothesis for migrants to the EU-15 at the regional level. The empirical analysis based on a random parameters logit model shows that the regional location decisions of migrants are mostly governed by income opportunities, labor market conditions, ethnic networks and a common language.