Do Immigrants Move to Welfare? Subnational Evidence from Switzerland

Abstract

AbstractThe welfare magnet hypothesis holds that immigrants are likely to relocate to regions with generous welfare benefits. Although this assumption has motivated extensive reforms to immigration policy and social programs, the empirical evidence remains contested. In this study, we assess detailed administrative records from Switzerland covering the full population of social assistance recipients between 2005 and 2015. By leveraging local variations in cash transfers and exogenous shocks to benefit levels, we identify how benefits shape intracountry residential decisions. We find limited evidence that immigrants systematically move to localities with higher benefits. The lack of significant welfare migration within a context characterized by high variance in benefits and low barriers to movement suggests that the prevalence of this phenomenon may be overstated. These findings have important implications in the European setting where subnational governments often possess discretion over welfare and parties frequently mobilize voters around the issue of “benefit tourism.”