Skip to main content

Unemployment benefits, risk aversion, and migration incentives


With reference to the EU enlargement, a framework is derived which allows the study of the effect of unemployment benefits on the migration decision. While benefits simply increase the expected gain for risk neutral individuals, they work as an insurance device for risk averse migrants; the results for the two groups might differ. Thus, the migration decision is reformulated as monetary lottery. Unsurprisingly, the paper finds that risk averse individuals are less likely to engage in migration. Yet, introducing unemployment benefits also makes them select a different set of countries. The implications of selection and sorting, however, depend crucially on the link between risk aversion and economically important personal characteristics. It is also shown that unemployment benefits give rise to intertemporal trade-offs in migration returns.

This is a preview of subscription content, access via your institution.

Author information

Authors and Affiliations


Corresponding author

Correspondence to Axel Heitmueller.

Additional information

The author is grateful for helpful comments by Hartmut Lehmann, Christoph M. Schmidt and three anonymous referees. I also like to thank my colleagues at CERT and participants of the R.O.S.E.S. Enlargement Conference 2003 in Paris. This work has been conducted before the author joint DWP and does not reflect the opinion of the department. Responsible editor: Klaus F. Zimmermann.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Heitmueller, A. Unemployment benefits, risk aversion, and migration incentives. J Popul Econ 18, 93–112 (2005).

Download citation

  • Received:

  • Accepted:

  • Issue Date:

  • DOI:

JEL classification:

  • J60
  • J61
  • J65


  • Migration
  • unemployment benefits
  • risk aversion