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Immigration policy and welfare state design; a qualitative approach to explore the interaction

CPB Document 153, 23 October 2007

For the design of an immigration policy, in terms of the number and skills of the entrants and their effect on the host country, it is important to realize that the kind of welfare state matters.

This study confronts three possible labour migration regimes - a temporary, an open and a selective regime - with two possible welfare state settings - a highly redistributive and a hardly redistributive welfare state. By comparing the likely outcomes between the different regimes, and by taking possible effects on the self-selection of immigrants into account, the study draws the following conclusions.

First, both labour migration policy and the welfare state matter for the skill composition of labour migrants.

Second, to be attractive for high-skilled labour migrants a highly distributive welfare state needs to undo its discouraging effect on these migrants.

Third, a highly redistributive welfare state is attractive for low-skilled labour migrants. Because these migrants may become costly for such a welfare state once they manage to stay permanently, one should be careful with the introduction of temporary migration policies for the low-skilled.

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