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Trading off Welfare and Immigration in Europe

Hansen, Ole-Petter Moe; Legge, Stefan
Working paper
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URI
http://hdl.handle.net/11250/2349735
Date
2015-10
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  • Discussion papers (SAM) [578]
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.
Publisher
SAM
Series
Discussion paper;22/15

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