Migration and social insurance

Migration and social insurance

Mobility across countries is often suspected to affect the coexistence of different social insurance systems. A wide variety of social protection systems exist within the EU. Some are of Beveridgean inspiration (with universal and more or less flat benefits), while others are mainly Bismarckian (wit...

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Bibliographic Details
Published in:Recherches économiques de Louvain Vol. 80; no. 1; pp. 5 - 29
Main Authors: Cremer, Helmith, Goulão, Catarina
Format: Journal Article
Language:English
Published: De Boeck Université 01-01-2014
Subjects:
Economic integration
Humanities and Social Sciences
Social security
Social services
Social stability
Tax competition
Tax systems
Taxation
Social insurance
LABOR MOBILITY
COMPETITION
Tax competition
Mobility
PENSION SYSTEMS
BEVERIDGE
BISMARCK
SECURITY
Economic integration
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Summary:Mobility across countries is often suspected to affect the coexistence of different social insurance systems. A wide variety of social protection systems exist within the EU. Some are of Beveridgean inspiration (with universal and more or less flat benefits), while others are mainly Bismarckian (with benefits related to past contributions). Concerns about the sustainability of the most generous and redistributive (Beveridgean) insurance systems are often based on the assumption of (near) perfect and costless mobility. In reality, labor mobility remains limited. Such low levels of migration rates could, mistakenly, lead to the conclusion that migration would currently not be affecting the redistributive social insurance systems. We address this issue in a two-country setting, where mobility is costly and where individuals differ in mobility cost (attachment to their native country). A Bismarckian insurance system is not affected by migration while a Beveridgean one is. Our results suggest that the race-to-the-bottom affecting tax rates may be more important under Beveridge-Beveridge competition than under Beveridge-Bismarck competition. Finally, we study the strategic choice of the type of social protection. We show that Bismarckian governments may find it beneficial to adopt a Beveridgean insurance system. Reproduced by permission of Bibliothèque de Sciences Po
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
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ISSN:0770-4518
1782-1495
DOI:10.3917/rel.801.0005