Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Ole-Petter Moe Hansen
Trading off Welfare and Immigration in Europe.
() and Stefan Legge
Abstract: In this paper, we explore the trade-off Europe faces when
choosing between immigration from poor countries and welfare spending.
Using data from the European Social Survey on sixteen countries from
2002-2012, we document that voter preferences shifted in favor of
redistribution but polarized over low-skill immigration. Notably, there is
a sharp increase in the share of individuals supporting the welfare state
but heavily opposing immigration. In order to provide an economic
explanation for these phenomena, we present a model where support for both
immigration and redistributive policies are potentially motivated by
altruism. Using this model, we show how rising unemployment rates, shares
of foreign-born citizens and aggregate education can explain observed
shifts in policy preferences.
Keywords: Redistribution; Immigration; Unemployment; Inequality.; (follow links to similar papers)
JEL-Codes: F22; H20; O15; (follow links to similar papers)
58 pages, October 1, 2015
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