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 effects: the political participation effect and the
tax base effect. With emigration, the composition of the
constituency changes. This increases the political influence of the
less mobile part of the population. The new political majority has
to take into account that emigration reduces tax revenues and
thereby affects the feasible set of redistribution policies. The
interaction of the two e¤ects has so far not been analyzed in
isolation. We find 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.