Immigrants Weigh on Welfare
From the desk of Filip van Laenen on Mon, 2005-09-05 17:08
by Tyra Ekhaugen of the Frisch Centre for Economic Research and the University of Oslo.
“Non-western immigrants in Norway are shown to rely heavily on welfare transfers for several years after immigration. While refugee immigrants assimilate slightly out of welfare, other non-western immigrants assimilate rapidly into welfare.”Interestingly, the welfare dependency ratio grows the longer the immigrants are living in Norway. Ekhaugen analysed the annual situation from 1992 to 2000 of three types of adult immigrants - refugees and asylum seekers; non-western, non-refugee immigrants; and western (OECD) immigrants - arriving in the country between 1956 and 1996 (the author of this article arrived in 1997). She also looked into re-emigration patterns, concluding that “the probability of re-migration correlates negatively with the probability of receiving welfare.” She writes:
“The risk of attracting immigrants whose prime motivation for migrating is receiving rather than contributing is an oft-repeated concern. But at least as important as who comes, is who stays. Decisions of re-emigration may be positively correlated with the immigrant’s self-supporting ability, implying that the host country ends up hosting an increasing number of welfare recipients. Egalitarian welfare states could thus find themselves losing out to other, less egalitarian countries in the competition for labor supplying immigrants.”Ekhaugen researched the amount of welfare payments received: i.e. social assistance, unemployment benefits, disability pension, sickness benefits and rehabilitation benefits. The payments had to be received during at least one month per year, with the exception of sickness benefits, which were not counted for periods of less than three months to avoid defining too large a group as welfare participants.
If labour force participation is taken as a measurement for immigration success Ekhaugen’s research contradicts the often heard assertion that Norway’s labour market depends increasingly on immigrants. The study indicates quite the reverse. Moreover the situation has dramatically worsened during the past two decades. If the present evolution continues immigration will increase the pressure on the welfare state rather than relieving it because many immigrants do not join the tax-paying part of the population. Nevertheless, a distinction must be made between the different types of immigrants:
“Refugee immigrants do show signs of assimilating out of welfare, but the decrease is small […] The average non-western, non-refugee immigrant, most likely arriving on family reunification, assimilates into welfare […] We also see certain signs of assimilation into welfare among the western immigrants, but the claimant probability is notable lower throughout than is the case for the other groups.”
Ekhaugen’s study shows that after 17 years in Norway refugees become less welfare dependent than non-western immigrants. 50% of the non-western immigrants who settled in Norway in the period from 1966 to 1975 were welfare dependent 25 years later. 60% of the group of refugees who arrived between 1992 and 1996 were still receiving welfare benefits 5 years later, while this was only the case for 36% of the non-western immigrants and 18% of the immigrants from western countries. After 8 years 55% of the fugitives was still receiving welfare subsidies. Of the foreigners who arrived between 1966 and 1985 40% was getting welfare payments after 20 years. For native Norwegians the figure is 27%, but because this group is on average older the difference with the immigrants is even greater than the figures indicate.
Ekhaugen concludes that “generally speaking, considering non-western immigrants, [expecting] a stable source of tax-revenue is […] arguably a tad naïve.” It would be interesting to know whether the Norwegian situation resembles that in other European countries. Not being naive, however, I think that in my native Belgium conducting similar research would be seen as a sure proof of “racism.”
Submitted by Bob Doney on Tue, 2005-09-06 11:56.
Couple of points.
The status - refugee, family reunification etc - of the individual immigrants is not known, but is inferred from their country of origin. So all the immigrants from Umbo Gumboland are assumed to be refugees, whereas all the immigrants from Mumbo Jumboland are assumed to be for family reunification. Given that their basic categories are "givers" or "receivers" and "Western" or "non-Western" there is great scope here for mischievous data.
Second, their definition of "welfare dependency" is that the immigrant should receive one of the named benefits for at least one month in a year. It might have been more interesting and revealing to ask whether their total economic contribution (work carried out, taxes paid, etc) exceeded their "take" from the system. But that of course would have made things more complicated.
Verdict: must try harder.