This article appears in the following Oxford Review of Economic Policy issue: LABOUR MIGRATION IN EUROPE [View the issue table of contents]
Immigrants and welfare programmes: exploring the interactions between immigrant characteristics, immigrant welfare dependence, and welfare policy
* Economic and Social Research Institute, e-mail: alan.barrett{at}esri.ie
** Central Bank and Financial Services Authority of Ireland, e-mail: yvonne.mccarthy{at}centralbank.ie
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Abstract |
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The primary purpose of this paper is to provide a review of the papers within the economics literature that have examined the questions of immigrant welfare use and the responsiveness of immigrants to the incentives created by welfare systems. While our focus is largely on papers looking at the European case, we also draw on studies from the United States, in particular on issues where the European literature is thin. One set of papers asks whether immigrants who are more likely to use welfare are attracted to more generous welfare states. The results from these papers are not clear-cut. Another set of papers asks if immigrants use welfare more intensively than natives and if they assimilate out of or into welfare participation. In most cases, the unadjusted data show higher use of welfare by immigrants, although for some countries, for example Germany, this can be explained by differences in immigrants’ characteristics. Yet another set of papers finds that the rate of welfare use by existing migrants can influence the welfare use of newly arrived co-nationals. We illustrate some of these issues by looking at immigrant welfare use in Ireland and the UK. Immigrants in the UK appear to use welfare more intensively than natives, but the opposite appears to be the case in Ireland.
Key Words: immigrants • welfare participation • Ireland • UK
We would like to acknowledge the helpful comments of participants at a conference organized by the Oxford Review of Economic Policy and COMPAS, and of two referees. We would also like to acknowledge the help provided by Mark Taylor in accessing the British Household Panel Survey (BHPS). The BHPS data (and tabulations) used in this paper were made available through the ESRC Data Archive. The data were originally collected by the ESRC Research Centre on Micro-social Change at the University of Essex (now incorporated within the Institute for Social and Economic Research). Neither the original collectors of the data nor the Archive bear any responsibility for the analyses or interpretations presented here. Any views expressed are those of the authors and not necessarily those of either the ESRI or the CBFSAI.
1 We discuss this measure at great length in section III, when we return to the Brücker et al. (2002) chapter.
2 He quotes Borjas (1999) as providing support for this view.
3 The native reference group was selected so as to match the distributions of age and educational attainment for the immigrant group. Hence, even if the employment situation of low-skilled workers generally deteriorated between the early 1970s and 2000, the comparison between immigrants and the native reference group allows for differential outcomes to be observed.
4 We are grateful to an anonymous referee for pointing this out.
5 As pointed out by the authors, there was no interaction between municipal officials and refugees and so selections were based purely on a limited number of observed characteristics. Hence, the authors argue that ‘it is realistic to treat the neighbourhood assignment as exogenous with respect to the random components of the outcomes of interest, conditional on observed characteristics’ (p. 9, authors’ italics).
6 In essence, this analysis updates Barrett and McCarthy (2007), which was based on the 2004 wave of the EU-SILC.
7 In essence, the immigration surplus can be thought of as the extra output that is produced as a result of immigration that is not appropriated by the immigrants themselves.