On the Political Economy of Low Skilled Immigration and the Welfare State

Kemnitz, Alexander
July 2002
International Tax & Public Finance;Jul2002, Vol. 9 Issue 4, p423
Academic Journal
This paper inquires into the collective decision making on both unemployment insurance and immigration. It is shown that low skill immigration typically increases the contribution rate to the unemployment insurance system. This can translate into higher benefits, the increase of the economy-wide unemployment rate nonwithstanding. The host country allows for immigration only if high skilled natives are sufficiently powerful. Furthermore, political rights of immigrants are restricted to a minimum.


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