The Welfare Magnet Hypothesis: Evidence from an Immigrant Welfare Scheme in Denmark: Comment
Agersnap, Jensen and Kleven (2020) study the effect of changes in welfare benefit levels on immigration in Denmark, reporting a large migration elasticity of 1.3. However, their approach reports an illdefined net migration elasticity, conflates migration with migrant residents turning 30, and is sensitive to origin-country shocks. All of these exaggerate the size of the welfare magnet effect. Using an alternative approach that addresses these concerns, I find substantially lower migration elasticities: at most 0.28 for arrivals and 0.14 for stocks. Moreover, I find that lower benefits do not increase the average skill level of migrants.
JEL-Klassifikation: F22, H53, I38, J15