ABSTRACT
This chapter examines the impact of immigration on institutions using a broad measure of economic freedom that has been shown to be associated with improved economic outcomes. It examines how migration impacts countries' economic institutions using the Economic Freedom of the World. Welfare and other public assistance programs typically are more generous in recipient nations than those in immigrants' homelands. A greater demand for public education is another way in which immigration might increase the size of government. An alternative hypothesis is that welfare states will shrink because the native-born population will be less willing to have a large welfare state once many of the benefits are going to immigrants rather than to the native-born population. Alesina and Glaeser argue that fractionalization and ethnic heterogeneity are the main reasons why the United States has a smaller welfare state than most Western European countries.
