A potential endogeneity problem may arise, in particular between the level of social benefits in the host country,bd, and the skill difference in the migration rates, because high-skill immi- grants can influence the potential economic equilibrium level of benefits. For example, more immigration may lead to lower level of social spending per-capita, ifmigrants are more likely to become unemployed, or if migrants come with large dependent families. Therefore, the levels of social benefits that are employed in the estimation are not concurrent levels, but rather those of the pre-sample period 1974-1990.