March 2012

IZA DP No. 6450: Welfare Migration

published in: Amelie F. Constant and Klaus F. Zimmermann (eds.), International Handbook on the Economics of Migration, Edward Elgar 2013, Cheltenham, UK, and Northampton, USA, Chapter 26, 489-504

This chapter reviews and discusses major theories and empirical studies about the welfare magnet hypothesis, i.e. whether immigrants are more likely to move to countries with generous welfare systems. Although economic theory predicts that welfare generosity affects the number, composition and location of immigrants, the empirical evidence is rather mixed. We offer possible explanations for the existence of such mixed evidence and highlight that the literature so far has overlooked the presence of different migration regimes, as well as the possibility of reverse causality between welfare spending and immigration.