Migration and the Welfare State: The Economic Power of the Non-Voter?

This paper investigates the impact of emigration on the political choice regarding the size of the welfare state. Mobility has two countervailing e¤ects: the political participation e¤ect and the tax base e¤ect. With emigration, the composition of the constituency changes. This increases the political inuence of the less mobile part of the population. The new political majority has to take into account that emigration reduces tax revenues and thereby a¤ects the feasible set of redistribution policies. The interaction of the two e¤ects has so far not been analyzed in isolation. We \u85nd that the direction of the total e¤ect of migration depends on the initial income distribution in the economy. Our results also contribute to the empirical debate on the validity of the median-voter approach for explaining the relation between income inequality and redistribution levels