DP10127 Migration and Welfare State: Why is America Different from Europe?

Author(s): Assaf Razin, Efraim Sadka
Publication Date: September 2014
Keyword(s): Fiscal and Migration Competition, Fiscal and Migration Coordination
JEL(s): F22, H23, J11
Programme Areas: International Macroeconomics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=10127

Over the years, there emerged two key policy differences between Europe and America, both welfare and migration-states. The former has more generous welfare state and more liberal migration policies than the latter. In this paper we attempt to provide a political-economy explanation for these key differences, based on the degree of coordination among member states of the economic union, and the different levels of population aging.