Immigration to the European Union from its neighborhoods : Testing welfare-chasing and related hypotheses by spatial gravity

Purpose – The purpose of this paper is to examine the determinants of immigration from European Neighborhood (EN) and new member states to the EU core countries over the period 2000-2010. Apart from income differentials, unemployment rates and other standard variables hypothesized to determine immigration, the paper focusses attention on welfare-chasing as well as measures to enforce immigration policy. Using a variant of the gravity model, the paper investigates whether tests of these hypotheses are robust with respect to spatial misspecification. Design/methodology/approach – The determinants of migration from the European Neighborhood and new member states to the EU core countries is estimated using a spatial variant of the gravity model. The methodology is used for both multilateral and spatial flows. Gravity model estimations are presented for immigration into the EU core destinations using standard, non-spatial econometrics, as well as spatial econometrics for single and double-spatial dynamics. Findings – Immigration to EU core countries varies directly with the change in social spending per head in the destination. This result stands out in all the models, both OLS and spatial. Immigrants are attracted by economic inequality as measured by the Gini coefficient. However, in this case it is the level that matters rather than its change. No evidence is found that the threat of apprehension at the destination deters migrants from the European Neighborhood and other countries. Research limitations/implications – The authors assume multilateralism is spatial. This means that everything else given, destinations are closer substitutes the nearer they are, and that immigration shocks are likely to be more correlated among origins the closer they are. This implicit assumption is restrictive because multilateralism is just spatial. Social implications – While immigration to EU core countries varies directly with the change in (not level of) social spending per head. If a given country becomes more benevolent it attracts more immigration. The results suggest that if during 2000-2010 social spending per capita grew by 1 percent, the immigration rate increased by between 1 and 2 percentage points relative to the number of foreign-born in 2000. This is a large demographic effect. Originality/value – Uniquely, this paper does not assume immigration flows are independent and stresses their spatial and multilateral nature. A series of new non-spatial and spatial (single and double-spatial lag) models are used to empirically test hypotheses about the determinants of immigration to the EU core countries.