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Title: Does migration threaten the sustainability of European welfare states?
Author(s): Peter Huber and Doris A. Oberdabernig
Year: 2013
Month: July
Number: 21
Pages: 135
File URL: fileadmin/documents/pdf/Workingpapers/WWWforEurope_WPS_no021_MS16.pdf
Keywords: Oaxaca-Blinder decomposition, EU-countries, migration, net contributions, welfare state
JEL-Codes: J61, J15, H53, I38
Abstract: We investigate the relative contributions of migrant and native households to welfare states. Using two step Oaxaca-Blinder decompositions that control for selection into bene t take-up, we are able to identify the individual variables contributing to di erences in welfare receipt by native and migrant households. We nd that most of the di erences are explained by observable characteristics such as size of the household as well as age and education of its head and income in some countries. In contrast, signi cantly lower net contributions of migrant households to the state budget persist in many countries even after controlling for observable factors. The reasons for this are primarily lower tax payments of migrant households. Selective migration and sound integration policies and as well as policies avoiding marginalization of migrants in informal labor markets are therefore the most e ective means to avoid scal burdens of migration.

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