Is free migration compatible with a
European-style welfare state?
Philippe Legrain, Visiting Fellow, European Institute,
London School of Economics
Expert report nr. 11 to Sweden’s Globalisation Council
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EXPERT REPORT NUMBER 11 TO SWEDEN’S GLOBALISATION
COUNCIL
© THE GLOBALISATION COUNCIL 2008
AUTHOR Philippe Legrain
GRAPHIC DESIGN Nina Rosenkvist
PRINT Edita, Västerås 2008
ISBN 978-91-85935-05-5
ISSN 1654-6245
ORDER The Globalisation Council
PHONE 0046 8 405 10 00
E-MAIL [email protected]
www.sweden.gov.se/globalisation
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Preface
Free immigration is widely believed to be incompatible with
a welfare state, on the left as well as on the right. This report
examines in greater depth the possibility that rich countries
act as “welfare magnets” for people from poorer countries.
More careful consideration reveals that this view is too simplistic. Looking narrowly at the impact of free migration on public finances ignores its broader economic benefits. These are
potentially huge, and would make it easier to pay for the welfare state. Migration should be seen as an opportunity, not
a threat. It is a matter of human rights and humanitarianism
as well as self-interest.
The 11th report to the Globalisation Council treats the question
on how to combine free immigration and a developed social
insurance system in a welfare state. The Swedish government
already allows free migration from the EU. It is now proposing
a reform of immigration law in the latter half of 2008 that would
open up more channels for those outside the EU wishing to
come to Sweden to work. The author believes that this would
be a big step forward creating a simplified procedure for recruiting non-EU workers based on labour-market demand that
is flexible, transparent and aims to be sustainable in the long
term. Still, it is argued that in order to realise the full potential
of immigration, further liberalisation is needed.
The author Philippe Legrain is the author of Immigrants: Your
Country Needs Them. He is a visiting fellow at the London School
of Economics’ European Institute. He is also a commentator on
globalisation, migration and European issues for publications
such as the Financial Times, the Guardian, The Times, as well
as for BBC TV and radio. The author takes full responsibility
for the results and analysis presented in the report.
Stockholm, April 2008
Pontus Braunerhjelm
Principal Secretary, The Globalisation Council
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Globalisation Council members
The Swedish Government has established a Globalisation Council to promote a deeper knowledge of globalisation issues, draw up economic policy strategies and broaden public dialogue about what needs to be done to ensure that Sweden can compete
successfully in a world marked by continued rapid globalisation. The Council’s work
is expected to lead to proposed measures whose purpose, broadly defined, will be to
boost Sweden’s competitiveness and attractiveness on the international scene.
In addition to regular Council meetings, background reports will be written by independent researchers and other experts. These will be quality assessed by reference
groups composed of representatives from academia and the Government Offices and
by leading economists on the Council’s Advisory Board. The work of the Council,
which must be completed well before the 2010 general election, will be documented
in a final report along with economic policy recommendations. Plans are also being
drawn up for a number of external activities, such as conferences and seminars.
The Council comprises representatives from the business sector, the Government,
social partners, the government administration, the media and the research community. It is chaired by the Minister for Education and Research, Lars Leijonborg. The
Principal Secretary is Pontus Braunerhjelm.
The other members are:
Kristina Alsér, Mercatus Engineering AB, County Governor, Kronoberg County
Hans Bergström, columnist and reader in political science
Carl Bildt, Minister for Foreign Affairs
Urban Bäckström, Director-General, Confederation of Swedish Enterprise
(Svenskt Näringsliv)
Lars Calmfors, professor of international economics
Per Carstedt, CEO, SEKAB Group
Dilsa Demirbag-Sten, journalist, author
Anna Ekström, Chair, Swedish Confederation of Professional Associations (SACO)
Lars Leijonborg, Minister for Education and Research
Sven Otto Littorin, Minister for Employment
Wanja Lundby-Wedin, President, Swedish Trade Union Confederation (LO)
Karin Markides, President, Chalmers University of Technology
Elisabeth Nilsson, President, Swedish Steel Producers’ Association (Jernkontoret)
Aina Nilsson Ström, Head of Design, AB Volvo
Sture Nordh, Chair, Swedish Confederation of Professional Employees (TCO)
Mats Odell, Minister for Local Government and Financial Markets
Maud Olofsson, Minister for Enterprise and Energy and Deputy Prime Minister
Carl-Henric Svanberg, President and CEO, Ericsson
Lena Treschow Torell, President, Royal Swedish Academy of Engineering
Sciences (IVA)
Harriet Wallberg-Henriksson, President, Karolinska Institutet
Marcus Wallenberg, Chair, International Chamber of Commerce (ICC)
Olle Wästberg, Director-General, Swedish Institute (Svenska Institutet)
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Table of contents
Preface
3
Globalisation Council members
4
Abstract
6
1
Introduction
7
2
Are rich countries welfare magnets?
9
3
Are immigrants a burden on
public finances?
16
4
Labour rights without social rights?
24
5
The economic impact of free migration
29
6
Does immigration undermine
political support for the welfare state?
35
7
The impact of Sweden’s proposed reforms
39
8
Conclusion
41
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Abstract
This report examines the interaction between free migration and a
European-style welfare state, with particular reference to Sweden.
It considers whether rich-country welfare states act as a magnet for
migrants from poorer countries, examines immigrants’ net impact on
public finances, and suggests ways of reconciling free migration with a
generous welfare state. It looks at how the broader economic impact
of free migration would affect the affordability of the welfare state
and examines the claim that greater diversity reduces political support for the welfare state. It concludes that while free migration may
pose challenges to a European-style welfare state, the two are not
incompatible. On the contrary: by boosting economic growth, free
migration could actually make the welfare state more affordable.
Philippe Legrain is the author of Immigrants: Your Country Needs
Them (Little, Brown, 2007), which was shortlisted for the 2007
Financial Times Goldman Sachs Business Book of the Year Award.
He is a visiting fellow at the London School of Economics’ European Institute, a journalism fellow of the German Marshall Fund of
the United States and a contributing editor to Prospect magazine. He
is also a commentator on globalisation, migration and European issues for publications such as the Financial Times, the Guardian, The
Times, as well as for BBC TV and radio. Previously trade and economics correspondent for The Economist and special adviser to World
Trade Organisation Director-General Mike Moore, his first book was
Open World: The Truth about Globalisation (Abacus, 2002). He blogs
at www.philippelegrain.com.
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1. Introduction
It’s just obvious that you can’t have free immigration and a welfare
state.
Milton Friedman1
Milton Friedman’s claim that free immigration is incompatible with
a welfare state is widely believed, on the left as well on the right. The
logic behind it is simple: if people from poorer countries can migrate
freely to rich ones and claim welfare benefits there, and are better off
doing so, then many will – and this will pose such an economic burden on rich-country taxpayers that political support for the welfare
state will be undermined. On the surface, Friedman’s argument seems
plausible. But more careful consideration reveals that it is narrow and
simplistic. While it is certainly conceivable that free migration could
make a European-style welfare state economically and politically unsustainable, this is neither inevitable, nor indeed likely.
Friedman’s argument has parallels to the notion that globalisation is
inexorably destroying the welfare state through a “race to the bottom”,
as the movement of people and companies to low-tax economies
erodes the tax base in high-tax ones. This belief, also widely held across
the political spectrum, is demonstrably untrue: Sweden, for one, combines a highly open economy with very high taxes. While Sweden’s
taxes are arguably too high, and doubtless cause some people and
companies to relocate, globalisation does not render them unsustainable. Although Swedes are free to move anywhere within the European Union (EU), only a few have emigrated for tax reasons.
Fears about a race to the bottom have not been realised for several reasons. First, taxes are not simply costs: they generally pay for
benefits, such as socialised medicine and state pensions, too. Second,
even for individuals who pay more in taxes than they receive in benefits, Sweden’s other attractions may outweigh the lure of lower taxes
elsewhere. As I wrote in Open World: The Truth about Globalisation,
1
Quoted in Peter Brimelow, “Milton Friedman at 85”, Forbes, 29 December 1997, page 52.
IS FREE MIGRATION COMPATIBLE WITH A EUROPEAN-STYLE WELFARE STATE?
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“We are rooted to places by family, friends, language and culture.
For every Bjorn Borg, who claims residence in Monte Carlo in order
to avoid Sweden’s high taxes, there are countless Svens who are
still willing to fork out.”2 There is more to life than a lower tax bill.
Third, open economies tend to enjoy faster growth, which lightens
the burden of paying for the welfare state. Far from making Sweden’s
welfare state unaffordable, globalisation helps pay for it.
Since Swedes are not emigrating en masse in order to slash their
tax bills, why should one assume that huge numbers of people
from poorer countries want to move to Sweden to claim its generous welfare benefits? EU citizens are free to move to Sweden,
yet remarkably few poor Poles and other east Europeans have
done so – and overwhelmingly to work rather than to claim welfare.
Far from overwhelming the welfare state, allowing non-EU citizens to
come and work in Sweden freely would give a huge boost to the economy, helping to sustain public services and welfare provision.
Some of the important terms used in this report are defined as follows. Free migration entails the absence of border restrictions on foreign nationals participating in a country’s labour market on the same
terms as citizens. Immigrants are foreign-born residents, whether shortterm or longer-term. The welfare state is the sum total of social insurance, welfare benefits, social investment and public services provided
by governments to citizens and/or residents.
The report is divided into eight sections. Section 2 examines in greater depth the possibility that rich countries act as “welfare magnets”
for people from poorer countries. Section 3 argues that looking at the
welfare burden that immigrants do, or might, pose ignores their contribution as taxpayers and employees, and considers the net impact of
immigration on public finances. Section 4 explores welfare reforms
that would mitigate economic and political fears about immigration,
and argues that allowing foreigners open access to the labour market
need not imply granting them full social rights immediately. Section 5
argues that looking narrowly at the impact of free migration on public
finances ignores its broader economic benefits. These are potentially
huge, and would make it easier to pay for the welfare state. Section
6 considers the political impact of immigration on the welfare state and weighs up the argument that greater diversity erodes voters’
willingness to pay for social insurance. Section 7 briefly considers how
the Swedish government’s proposed immigration reforms might interact with its existing welfare system. Section 8 concludes.
2
Philippe Legrain, Open World: The Truth about Globalisation, Abacus, 2002, page 158.
8 • Expert report to Sweden’s Globalisation Council
2. Are rich countries welfare magnets?
“All you bleeding hearts want to invite the whole world in here to feed
at our trough without a thought as to who’s going to pay for it, as if
the American taxpayer was like Jesus Christ with his loaves and fishes,”
says a racist lawyer in The Tortilla Curtain, T. C. Boyle’s book about immigration in California.3
The fear that immigrants are coming to “feed at our trough” is almost
as old and deep-seated as the fear that they are “stealing our jobs”. At
New York’s Ellis Island, the main entry point to the United States for
the millions of Swedes and other poor Europeans who migrated in the
late 19th and early 20th century, inspectors sought to weed out foreigners “liable to become a public charge”. Through the Aliens Act of
1905, Britain sought to keep out paupers and vagrants. More recently,
critics of immigration have whipped up fears that foreigners come to
sponge off welfare. Do they have a case?
If people from poorer countries are better off on welfare in rich
countries than working in their country of origin, this could conceivably motivate them to migrate – and if enough do, the welfare state
could become economically and politically unsustainable. As George
Borjas of Harvard University, a leading critic of immigration in the
United States, puts it:
welfare programs will probably attract people who qualify for subsidies and repel persons who have to pay for them. A strong magnetic effect, combined with an ineffective border control policy, can
literally break the bank. In addition, immigration can easily fracture
the political legitimacy of the social contract that created and sustains the welfare state. No group of native citizens – whether in
the United States or in other immigrant-receiving countries – can
reasonably be expected to pick up the tab for subsidising hundreds
of millions of ‘the huddled masses’.4
3
4
T. C. Boyle, The Tortilla Curtain, Bloomsbury, 2004.
George Borjas, Heaven’s Door: Immigration Policy and the American Economy, Princeton University Press,
1999, page 114.
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Borjas’s argument rests on exaggeration: he talks about subsidising
“hundreds of millions” of destitute foreigners, even though such a
huge flow of welfare migrants did not occur in previous decades when
the US border with Mexico (and hence Latin America) was more or
less open. But having stoked up readers’ fears, Borjas cannot substantiate them. He is forced to concede that:
there exists the possibility that welfare attracts persons who otherwise would not have migrated to the United States. Although this
is the magnetic effect that comes up most often in the immigration
debate, it is also the one for which there is no empirical support.5
Borjas’s escape clause is that that this magnetic effect is the “hardest
to corroborate”, since “It is doubtful that many immigrants would
willingly volunteer the information that they came to the United
States to collect SSI benefits [welfare for the old and disabled poor]
or Medicaid [public healthcare for the poor].” That is true, but in the
absence of corroborating evidence, his assertion is no more than a
hypothesis – and there is good reason to believe it is false.
In 1996, the US Congress passed the Personal Responsibility
and Work Opportunity Reconciliation Act (PRWORA) – commonly
known as the welfare-reform act – which cut off legal immigrants’
access to federal public benefits and imposed even more stringent
restrictions on illegal immigrants (for details, see section 4 below).
If many Mexicans were moving to the US to claim welfare, the
act ought (other things equal) to have reduced immigration from
Mexico over the past decade. In fact, immigration has increased – which
suggests that most Mexicans are actually coming to work.
By European standards, America’s welfare state is threadbare.
Might Sweden’s more generous welfare state attract poor migrants?
For a country to act as a welfare magnet, all of the following conditions must hold:
1. people in poor countries have to be desperate or ambitious enough
to want to leave home in the first place – i.e., the expected costs of
staying and/or the expected benefits of migrating must be so great
that they outweigh the large financial, psychological and other
costs and risks of migrating;
5
Ibid.
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2. they have to be able to migrate;
3. of all the possible locations they could move to, they have to prefer
Sweden, or at least they have to end up there as a result of a chain
of decisions and events;
4. adjusted for differences in purchasing power, welfare benefits in
Sweden have to be higher than an immigrant’s expected income in
his or her country of origin;
5. welfare benefits must be immediately available to newly arrived
immigrants, or immigrants must have sufficient funds or other
assistance to sustain them until they become available; and
6. immigrants have to prefer life on welfare to the greater rewards –
higher incomes, fulfilment and status – of working.
While some people might conceivably become welfare migrants, it is
highly unlikely that their numbers would be great enough to endanger
the welfare state. For a start, relatively few people are willing and able
to migrate in the first place. People are tied to their home by emotional attachment, family, friends, jobs, property and assets that are not
readily sold or retained in absentia, language, culture, hope, fear of
change, fear of the unknown, and many other things. While some
people are footloose and fancy-free, most aren’t. Most are risk-averse –
and migrating is a huge leap in the dark.
Even when life is dire, most people stay put, out of choice or necessity. Despite the carnage in Iraq, only a minority have moved to
neighbouring Jordan or Syria, let alone further afield. Although large
disparities in income and quality and life exist among neighbouring
African states that have little or no control over their borders, migratory flows are relatively small. A surprisingly large proportion of those
who do take the plunge and migrate end up returning home: a third
of the Europeans who migrated to America in the late 19th and early
20th centuries came back, for instance. Now that migration within
the EU is cheaper and easier, the few who move mostly move temporarily. In short, most people don’t want to leave home at all, let alone forever. It is ironic that opponents of immigration, who tend to
prize their “home”, “roots” and “nation”, fail to recognise that others might also be attached to their home, however poor it might be.
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Together, the first two conditions ensure that relatively few migrate: the poorest and most desperate may want to, but may not be
able to; the richer and less desperate may be able to, but not want
to. Migrants are thus a self-selected minority, who tend to be more
enterprising and hard-working than most – because only the adventurous are willing to take the risk of migrating, while only the
industrious who have most to gain from it are willing to bear the costs
of it. Just as people who are willing to incur the costs and risks of
starting their own business tend to be more hard-working and enterprising than most, so too do those willing to incur the costs and risks
of upping sticks in search of a better life abroad.
Of course, the costs and risks of migration are not fixed: if borders
are open, transport costs cheap, opportunities plenty, and cultural and
other obstacles to migration low, more people will tend to move than
otherwise. But even then, only a minority tend to leave. As US citizens, poor Puerto Ricans are free to move to the continental United
States, yet relatively few do.6 Only a fraction of the 75 million people
in the A8 countries, the eight ex-communist countries that joined the
EU in 2004, have emigrated to the rest of the EU.7
Migrants’ destination is influenced by a host of factors. Economics is clearly important: people tend to migrate to richer countries,
although not always – there are lots of Westerners working in developing countries. History (such as former colonial links) is also
an influence, as is geographical proximity – the biggest source of
migrants to Sweden remains Denmark, with Finland in fourth and
Norway in fifth place.8 Over time, though, they have become less
so: Stockholm is increasingly cosmopolitan; London even more so.
Government policy matters: since Sweden opened its borders to
the A8, Poland has become the second-biggest source of migrants.
Refugee policy is particularly important in Sweden: it received
17,500 asylum applications in 2005, and admitted 8,100 foreigners
on humanitarian visas, with Iraq the third-biggest source of migrants
overall.9 Once two countries have established links through migration,
the dynamic tends to be self-reinforcing: the first migrants bring over
6
7
8
9
The US Census Bureau estimates that 126, 465 Puerto Ricans migrated to the US in the 1980s and
111,336 in the 1990s, out of a population of 3.2 million in 1980 and 3.5 million in 1990. That is 4%
of the population over the 1980s and 3.2% over the 1990s. http://www.census.gov/population/www/
documentation/twps0064.html and http://www.census.gov/compendia/statab/tables/08s1290.pdf.
The A8 are the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia.
OECD, International Migration Outlook 2007, page 285.
Ibid., Table I.6, and page 285.
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their relatives, the existence of an established migrant community abroad makes it easier for others from the same country to come and
settle in a foreign land, new trade and investment ties are created that
stimulate further migration, and so on. Last but not least, personal
reasons are often decisive: many people move to be with friends or
family, because they want to learn a particular language, or because
they are especially attracted to a country’s culture and way of life.
Migration patterns thus reflect a complex mixture of economic incentives, government policy, political events, history, geography, family
ties and personal reasons.
While some migrants may favour Sweden, most prefer to go elsewhere. The belief that “everyone wants to come here”, which is
often voiced in each rich country, is demonstrably false. For sure,
Sweden’s generous welfare system may make it more attractive to
potential welfare migrants than, say, the United States. Yet neighbouring Norway is arguably even more generous. Besides, migrants may
not like cold weather; they may prefer to learn English; they may have
relatives in Germany; and so on. In 2004, when Britain, Ireland and
Sweden alone opened their labour markets to the A8 countries, very
few opted for Sweden, despite its geographical proximity, historical
ties, high living standards and generous welfare state. Since Britain
and Ireland restricted A8 citizens’ access to social benefits for the first
year, prospective welfare migrants should have opted for Sweden. Yet
of the 324,000 Poles who emigrated in 2005, only one in 100 went to
Sweden – overwhelmingly to work.10
The welfare-magnet argument also presumes that life on welfare
in rich countries is more attractive than working in poor countries.
Often, this is not the case. Basic welfare benefits in most rich countries
are not particularly high. Adjusted for the higher cost of living in rich
countries, they may not be higher than wages in developing countries.
Allowing for the fact that most people would prefer not to uproot
themselves to a strange, foreign land, and that moving is costly and
risky, welfare benefits in rich countries have to be considerably higher
than wages in developing countries for significant numbers to migrate
for that purpose. It beggars belief, for instance, that an Afghan would
pay a smuggler £5,000 in order to come to Britain and claim £50 a
week in benefits as an asylum seeker.
10
Ibid., Table I.2 and Chart I.7.
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Sweden, though, has a particularly generous welfare system. The
OECD calculates that welfare benefits – social assistance plus housingrelated cash benefits – amounted to SEK103,640 a year in 2005 for a
single person with no entitlement to unemployment benefits, rising to
SEK167,500 for a couple with two children, who would also be entitled
to family benefits.11 Converted into 2005 US dollars, this is $13,820 for
a single person and $22,330 for a family of four.12 A further adjustment
must be made for the higher cost of living in Sweden: the World Bank
estimates that prices in Sweden are 24% higher than in the United States.
Allowing for this difference, a single migrant is entitled to $11,145 in
benefits, and a family of four, $18,010. That sounds like a powerful
magnet – until one realises that average income per person in Poland
is $13,600 adjusted for differences in purchasing power ($54,400
per family of four), while it is $7,790 in Turkey ($31,160), $3,550 in
Morocco ($14,200) and $2,400 in Pakistan ($9,600).13
It clearly makes no sense for the typical Pole to move to Sweden to claim
welfare benefits.It makes little sense for the averageTurk either:one has to
assume that Turks are desperate to leave their country, have a very
strong preference for Sweden, and are not deterred at all by the costs
and risks of migrating in order to believe that a 40% rise in income
is enough to motivate many to move. But what about an individual
Moroccan or Pakistani? With welfare benefits in Sweden around three
times higher than average incomes in Morocco, and around fourand-a-half times higher than those in Pakistan, it might seem plausible
that the Swedish welfare state would be a powerful magnet.
Yet migrants cannot simply turn up in Sweden and start claiming benefits. While there is social provision for asylum seekers and
refugees, visitors and prospective migrants are not immediately entitled to welfare. Migrants require a national registration number in
order to claim most benefits, while unemployment benefits can only
be claimed by those who have already worked in Sweden for a sufficient time.14
But perhaps the most important reason why welfare migrants
are rare is that even if immigrants were better off on welfare in a
rich country than back home, they would still be even better off
OECD, Social Policy Division - Directorate of Employment, Labour and Social Affairs, Benefits and
Wages, “Sweden 2005”, http://www.oecd.org/dataoecd/39/29/39675469.pdf. Data is from http://
www.oecd.org/51/39/39662061.xls.
12
Calculations using World Bank’s International Comparison Program statistics, 2005.
http://siteresources.worldbank.org/ICPINT/Resources/summary-tables.pdf.
13
Ibid.
14
See details in Table 2.
11
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working. Underlying the welfare-magnet argument is the belief
that immigrants are lazy and don’t want to work. No doubt some
migrants are work-shy – as are some Swedes, Americans and Australians – but most aren’t. For the fears of people like Borjas to be
realised, immigrants would have to be both enterprising enough
to migrate in the first place but then suddenly sapped of enterprise once they arrive in a rich country, such that they prefer a
life on welfare to the much greater rewards of work. This is highly
improbable. People who want a comfortable life don’t tend to go to
the effort of uprooting themselves.
Once immigrants arrive in a rich country, they have a very strong
incentive to make the most of the greater opportunities available to
them. They start at the bottom of the pile, economically and socially.
They have to pay off the cost of migrating. They have to provide for
themselves and save up for a better future for their family. They most
likely want to send money home to their relatives and friends. Working pays better than welfare.
Undeniably, if borders were fully open, the cost of moving would be
much lower and the potential for welfare migration would increase.
But just as Swedes are not all rushing to Ireland to cut their tax bills,
and Romanians are not all moving to Sweden to claim welfare, opening up migration to the rest of the world is highly unlikely to lead
to a deluge of welfare migrants. The notion that free migration entails
providing charity to the whole world is more of a rich person’s irrational fear than a likely occurrence.
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3. Are immigrants a burden on
public finances?
Immigrants may not move to rich countries in order to claim
welfare benefits, but critics claim that they tend to end up
a drain on the public purse all the same – because they may
be disproportionately poor and unemployed, for instance.
Some enthusiasts claim on the contrary that young immigrants’ taxes
could pay for the generous pensions that rich-country governments
have promised their swelling ranks of old people. Are immigrants a
burden or a boon for public finances? The honest answer is: it depends. It depends on who immigrates and on what terms, as well as on
the assumptions used in making the calculation.
Estimating the net impact on public finances of anyone
– let alone a diverse group of people lumped together under the label “immigrants” – is fraught with difficulties. It depends on immigrants’ characteristics – such as their age, education, employment status, income, and the number of children they
have – and the terms on which they enter, such as how much tax
they have to pay as well as which social benefits and public services
they can access and when. Nor is it a simple matter of totting up
how much an immigrant pays in taxes in a year and subtracting how
much he or she receives in direct benefits. The calculation depends
heavily on which methodology is used, which time-frame is considered, which expenditures and revenues are included, how they are allocated, and whether individuals or households are considered.
Age is crucial. Over a lifetime, people are generally a net burden
on the state while they are in state-financed education; net contributors while they are working; and a burden again when they are
retired or require very expensive medical services. Immigrants
who arrive as young adults, having completed their education abroad and with a full working life ahead of them, are likely to be
net contributors over their lifetime if they remain in work. If they
leave before claiming a pension, or tend to die young, they can make
a significant contribution to financing natives’ pensions.
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Employment status is also vital: the unemployed are generally a
burden on the state. Income clearly matters too: in a progressive tax
system, people with higher incomes tend to pay more tax. Highlypaid migrants may make a particularly big contribution to public
finances. But the poor do not necessarily receive the most welfare
benefits: while direct assistance may be targeted at the poor, benefits
in kind – such as a free university education – tend to benefit the
middle classes disproportionately. The working poor may benefit less
than middle-class children and pensioners.
Families with young children receive more benefits than single people: free public education, as well as family benefits. But this
apparent subsidy to children is partly an artefact of a short time-horizon and taking a household rather than an individual approach. If one
considers children separately from their parents, couples with children
do not receive bigger benefits than single people: everyone is subsidised as a child and most pay this back in taxes once they start working.
If, however, children are educated in one country then move abroad,
they may never pay back the public investment in their education.
A snapshot – however it is calculated – of the taxes immigrants pay
and the benefits they receive in any year is clearly less representative
than an assessment over a lifetime. But an estimate of someone’s lifetime impact either must wait until they are dead or requires hugely
uncertain projections of their tax and benefit profile over future decades. The most comprehensive measure of all involves an intergenerational approach – estimating the net contribution that immigrants
and all their descendents make – but this involves even more heroic
assumptions.
The time-frame used is particularly important in determining the
impact of immigration on countries with large public debts and huge
unfunded pension promises. If a government runs up debts to pay for
current spending – such as generous pensions paid on a pay-as-you-go
basis – and plans to pay them back over, say, the next 40 years, then
a large influx of immigrants over that period will, in effect, help foot
part of the bill. Shifting the burden of paying off the national debt onto
future generations also shifts it, relatively, onto new immigrants.
Broader questions arise about how collective spending is allocated
among individuals at a point in time, and over time. Is a stay-at-home
mother who pays no taxes but looks after her three children really
a burden on the state, or is she providing childcare and other services which the state would be subsidising if she went out to work? If
immigrants are often victims of crime and racial abuse, are they a cost
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to the state, or should the costs be allocated to the (unidentified) criminals? Do immigrants reduce the budgetary cost of roads – by spreading
the burden of paying for them more widely – or do they add to it, by
increasing the costs of building and maintaining roads disproportionately? Accounting for social investments is also tricky. Free education
may provide huge social returns in the future; free healthcare likewise.
Eliminating free language classes and skills training for immigrants may
seem like a saving, but maintaining them may boost immigrants’ (and
natives’) future productivity, and hence future taxes. In short, the permutations are endless and there is no right answer.
Many studies have estimated the net fiscal impact of immigration.
Those that follow immigrants over time generally conclude that immigrants and their descendants tend to pay in more than they take
out – but only a little more.15 For what it’s worth, a study by Jan
Ekberg of Växjö University suggests that immigrants are currently a net burden on Sweden’s welfare state.16 Looking at the United
States, the National Academy of Sciences found that the average foreign-born resident was a net recipient of $3,000 from government over
their lifetime, but that their children were net contributors to the tune
of $80,000 each.17 Another study concluded that “the overall fiscal co
sequences of altering the volume of immigration would be quite small
and should not be a major consideration for policy.”18 A third agreed
that immigration has little impact either way on the government’s fiscal
position: “realistic changes in the level of immigration should be viewed
neither as a major source of the existing imbalance, nor as a potential solution to it.” 19 The study estimated that if defence spending rose
in line with the population, immigration worsened the fiscal situation;
if it didn’t, immigration improved government finances. Also, if the
US government put its finances on a sound footing now, the benefits
of immigration were less than if the government delayed.
OECD, Trends in International Migration, 1997.
Jan Ekberg, Immigration to the Welfare State: Is it a Burden or a Contribution? The Case of Sweden,
AMID Working Paper Series 48/2006.
17
J. Smith and B. Edmonston, The New Americans: Economic, demographic and fiscal effects of immigration, National Academy Press, 1997.
18
Ronald Lee and Timothy Miller, “Immigration, Social Security, and Broader Fiscal Impacts”,
American Economic Review Papers and Proceedings 90(2): 350–54, 2000.
19
Alan J. Auerbach and Philip Oreopoulos, “Analyzing the Fiscal Impact of U.S. Immigration”,
American Economic Review Papers and Proceedings 89(2): 176–80, 1999.
15
16
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Although the net impact of immigration on government finances
over several generations is likely to be small, immigration could mitigate the looming pensions crisis in some countries. If a country such
as Germany, where a shrinking workforce has to support a growing
pensioner population, allowed in over the next few decades millions
of young immigrants who had been educated abroad, this could deliver a one-off boost to public finances that eases the tax burden on
native workers. Moreover, by increasing the number of future taxpayers, thereby spreading government debt over a wider base, immigrants
automatically reduce the individual burden on native taxpayers.
One study finds that immigrants who arrive in Germany between
the ages of twelve and forty-five make a net contribution to public
finances over their lifetime – as much as $136,800 if they arrive aged
thirty.20 Since three-quarters of immigrants who arrived in 2000
were aged between twelve and forty-five, the authors estimate that
the average immigrant will make a net contribution over their lifetime
of $55,400. If Germany continues to admit 200,000 primarily young
migrants a year and their impact on taxes and government spending
is similar to that of current immigrants, immigration could reduce
natives’ net tax burden by around 30% – and by as much as 45% if
the number of immigrants rose each year so as to keep the German
population stable. In short, because Germany’s population is set to
age much more dramatically than America’s, and because this will
leave a huge hole in government finances given the generous pensions
that the German government has promised to pay its citizens, immigrants could potentially make a much bigger contribution to righting
Germany’s fiscal woes. The same may be true of Sweden.
While immigration may help some countries with their transitional
pensions problems, it cannot offset the ageing of their population.
After all, immigrants grow old too. The population of most rich
countries is set to shrink and age over the first half of this century,
because people are having fewer children and living longer. Already
in 2000, the average American woman was having only two children,
below the 2.1 needed to sustain the population, while the average
European woman was having a mere 1.4. With fewer children being
born and more old people around, the number of people of working age
20
Holger Bonin, Bernd Raffelhuschen and Jan Walliser, “Can Immigration Alleviate the Demographic
Burden?”, Finanz Archiv 57(1): 1–21, 2000.
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(aged 15-64) potentially able to support each old person (over 65)
– which is technically known as the “dependency ratio” – had fallen
to five in the United States and four in the EU-15. To prevent the
dependency ratio falling below three would require an annual inflow
of nearly 3 million migrants a year into the EU – roughly twice the
current legal and illegal flow from outside the EU.21
Despite the complexity of estimating the impact of immigration on
public finances, some broad-brush generalisations can be made. Young
immigrants who come to work temporarily without their families will
clearly be net contributors to public finances. They were educated
abroad and will retire abroad too, but are paying taxes while working
in Sweden. Since studies show that immigrants do not typically harm
the job prospects of native workers, they will not raise social spending on natives.22 Workers who stay only temporarily therefore tend
to swell rich-country governments’ coffers.
But what if immigrants who settle permanently tend to end up
unemployed and on welfare for long periods, and their children likewise? In Sweden, the employment rate in 2005 among the native born was 74.6%, while among the foreign-born it was 60.7%.
Unemployment was 7.9% among the native-born and 14.9% among
the foreign born.23 This gap is significant. Yet there is nothing
inevitable about it: while employment and unemployment rates
among the native-born did not change much between 1995 and 2005,
the employment rate among the foreign-born rose by 7.2 percentage
points, while the unemployment rate fell by 6.8 percentage points.
While immigrants’ children tend to do better than their parents,
they tend to fare less well than those of native Swedes. (The children
of immigrants are often called “immigrants” too, but they are not: they
were born in Sweden.) The OECD statistics in table 1 capture this
phenomenon, which applies to both men and women of all education
levels.
Clearly, this is a serious problem, not least for immigrants and their
children. But one cannot – and should not – conclude, as many do, that
immigrants have lower employment rates because they are work-shy,
for cultural or other reasons. Nor does Table 1 prove – or even suggest
– that free migration is incompatible with a welfare state.
United Nations Population Division, “Replacement Migration: Is It a Solution to Declining and Ageing Populations?”, 2000 http://www.un.org/esa/population/publications/migration/migration.htm.
22
See Philippe Legrain, Immigrants: Your Country Needs Them, Little, Brown, 2007, chapter 5.
23
OECD, International Migration Outlook 2007, Annex Table I.A1.1.
21
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Table 1. Employment rates, %, Sweden, 2004, 20-29 years old,
not in education24
Low
education
Men Women
Medium
education
High
education
Men Women
Men Women
Total
Men Women
Foreign-born
45
37
66
59
53
53
52
46
Native-born,
both parents
foreign-born
52
50
75
73
77
79
68
69
Native-born,
one parent
foreign-born
58
54
80
76
82
82
75
73
Native-born,
both parents
native born
66
58
86
82
87
88
83
81
Note: “Low” refers to below upper secondary education; “medium” to upper secondary and
post-secondary non-tertiary and “high” to tertiary education.
For a start, some of the gap may be due to discrimination. It is striking
that university-educated women with foreign-born parents have an
employment rate nine percentage-points lower than those with nativeborn ones. The daughters of immigrants who strive to obtain a university degree are hardly likely to be unwilling to work. If discrimination
accounts for all of that gap, it could explain almost all the difference in
employment rates across genders and education levels. If discrimination
is a big problem, the solution – which is desirable irrespective of immigration – is surely to enforce anti-discrimination laws more effectively.
Second, some of the gap may be due to other inequalities of opportunity: the children of poor immigrants may receive a worse education,
for instance. Among the children of immigrants, 23% of men and 31%
of women in their 20s have completed a university degree; among the
children of native-born Swedes, 30% of men and 42% of women have.
While this gap cannot directly explain the differences in employment
rates in Table 1, it may suggest that immigrants’ children have fewer
24
OECD, International Migration Outlook 2007, Annex Table I.A1.4.
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educational opportunities. Those who do obtain university degrees may
tend to have less good degrees than native Swedes, and they may have
fewer useful contacts. If so, the solution lies in more vigorous policies
– which are also desirable irrespective of immigration – to promote
equality of opportunity for everyone born in Sweden.
Third, the higher unemployment rate among immigrants in general may be due to the fact that they were disproportionately
employed in sectors of the economy affected by structural change,
and that they have been unable to find other work. Such problems
call for a host of responses, including more active labour-market
policies to encourage retraining and welfare reforms to increase incentives to work. Fourth, and perhaps most importantly, the gap in
employment rates for immigrants and their children may be due
to labour-market regulations and institutions that privilege insiders at the expense of outsiders. These include high payroll taxes,
job-protection measures that increase the cost and risk of hiring an
unknown quantity, restrictive union agreements, and so on. Since immigrants are by definition outsiders, and their children may be too,
such labour-market restrictions may disproportionately affect them.
Indeed, it may be precisely these barriers which have deterred Poles
and other A8 workers from migrating to Sweden in large numbers.
It is not correct, then, to blame immigrants’ higher unemployment
rates on immigrants themselves.
In effect, border controls are not the only barriers that may keep
migrants out of the Swedish labour market. So may domestic regulatory barriers and labour-market imperfections, such as information
and reputation issues, a failure to recognise foreign qualifications
and experience, discrimination, and wage rigidities. (Such barriers
may also apply to native-born Swedes, of course. Young people of a
working-class background, for instance, may to find it harder to find
a job than a more experienced middle-class person with more contacts.) While immigrants’ characteristics, such as their skills, aptitude
to work, and language ability, may be an issue, it is unlikely to be the
predominant one. As an excellent study by Benny Carlson of Lund
University shows, similar Somali immigrants fare far better in Minnesota (where there are many people of Swedish origin) than in Sweden.
This suggests that the problem lies more with Swedish institutions
than with the characteristics of Somalis themselves.25
25
Benny Carlson, Somalier i Minneapolis – en dynamisk affär (Somalis in Minneapolis – a dynamic
deal), Zufi, 2006. A short summary in English is published in Ulf Johansson Dahre (ed), The Role of
Diasporas in Peace, Democracy and Development in the Horn of Africa. Lund: Research Report in Social
Anthropology 2007:1.
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If the problem lies primarily with institutions not immigrants, throwing out all immigrants would not reduce unemployment among native-born Swedes; it would increase it.
Conversely, free migration would not necessarily raise the overall unemployment rate; it would alter its composition. Irrespective of
Sweden’s openness to immigration, efficiency and equity argue in favour of labour-market reforms that better combine security, flexibility
and opportunity.
Likewise, it is in Sweden’s interests to reduce discrimination, increase
equality of opportunity, promote active labour-market policies, make
labour markets fairer and more efficient, and reform the welfare state
in ways that improve incentives to work. Doing so will also help maximise the gains from free migration, both to public finances and the
economy as a whole. But in any case, free migration is compatible with
the welfare state, because granting foreigners the right to work need not
imply granting them access to the same welfare benefits as long-term
residents and citizens.
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4. Labour rights without social rights?
In a sense, the debate about the potential impact of immigration on
public finances is a red herring. While free migration implies that
governments do not attempt to limit the type and number of immigrants, they are still free to modify the terms on which foreigners
are admitted. In particular, if governments are worried about the potential burden that immigrants might pose to the welfare state, they
can restrict access to social rights for an initial period. This not only
eliminates the remote possibility of welfare migration; it also ensures
that immigrants do not end up a burden on the state – and are most
likely net contributors to it.
Some might object that this compromises the integrity of the welfare state, which supposedly demands that everyone on a territory have
the same social rights. It is certainly true that most welfare states – including Sweden’s – have over time granted increased social rights to
long-term residents, and often rights equal to those of citizens.26 It also
true that every civilised society’s ability to discriminate among people
on its territory is constrained by certain principles, which vary country
by country and evolve over time: preference cannot usually be given to
people of a certain race (although affirmative action programmes do);
generally, preference cannot be given to people of a certain religion
(although some European governments subsidise Christian schools
but not Muslim or Hindu ones); emergency healthcare is typically
available to all; men and women generally have similar social rights
(although household-based welfare systems may favour men, or women); and so on. But no government offers the same social – let alone
political – rights to visitors, tourists, foreign students, foreign businesspeople, short-term contractors, au pairs, temporary workers, shortterm residents and illegal immigrants as they do to long-term residents
and citizens. Even welfare states with universal aspirations in practice
reserve most benefits to residents, citizens and contributors.
26
See, for instance, Diane Sainsbury, “Immigrants’ social rights in comparative perspective: welfare
regimes, forms of immigration and immigration policy regimes”, Journal of European Social Policy,
Vol 16(3): 229–244, 2006.
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Even if one deems it desirable that states provide equal social rights to
everyone on their territory, in practice none do. At the same time,
there are limits to the extent to which liberal democracies can discriminate between the rights of people on their territory. But within
that broad range of possibilities, there is plenty of scope for crafting
welfare policies that are compatible with free migration as well as
fairness and decency.
As Lant Pritchett of Harvard University’s Kennedy School of Government points out, “Singapore manages to maintain an enormously
high level of benefits for its citizens with massive mobility. Kuwait has
one of the highest immigrant populations in the world, and you can’t
ask for a more cradle-to-grave welfare state than what Kuwait gives
its citizens. So it’s obviously possible to maintain whatever level of
welfare state you want and have whatever level of labor mobility you
want, as long as you’re willing to separate the issues.”27
Pritchett adds: “One of the awkward paradoxes of the world is
that Bangladeshis and Pakistanis and Nepalis are enormously better off precisely because the Persian Gulf states don’t endow them
with political rights. Because if you said to Kuwaitis, every Bangladeshi who comes in is going to acquire the full entitlements of Kuwaitis, I’m sure the Kuwaitis would cut the flow of Bangladeshis
to zero. The Bangladeshis have been made enormously better off by
the ability to work in Kuwait.”
Pritchett makes a good and important point, but that does not make
Singapore or Kuwait role models for Europe. Temporary foreign workers often live in segregated conditions, with fewer labour rights than
native workers, and with no possibility of eventually becoming residents and/or citizens with equal rights. And while many migrants are
allowed in, they are not allowed in freely: they are selected, and they
can be expelled at any time. In effect, the Singaporean and Kuwaiti
systems are extreme versions of the German guest-worker model.
What may be desirable for Europe is granting newcomers the right
to work freely on equal terms to native workers while giving them few
social rights initially.
As a comparative study28 by Michael Fix and Laureen Laglagaron
of the Urban Institute, a think-tank in Washington, DC, makes clear,
rich countries allocate social rights in a variety of ways; all, though,
distinguish between certain types of people. The study distinguishes
27
28
Interview in Reason, February 2008, http://www.reason.com/news/show/123912.html.
Michael E. Fix, Laureen Laglagaron, Social Rights and Citizenship: An International Comparison,
Urban Institute, August 2002 http://www.urban.org/url.cfm?ID=410545.
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between four general categories of residents, in descending order of
social rights:
– citizens;
– EU citizens: citizens of any EU country are granted full social rights
across the Union provided they are employed or self-employed;
– presumptively permanent non-citizens: long-settled non-citizens
and other immigrants entitled by law to settled residence in the
state (this group may include recognised refugees, persons authorised upon admission to reside permanently, and persons who attain
such a right after a period of residence in the state);
– presumptively temporary non-citizens: non-citizens whose presence is invited or tolerated for a limited period of time and whose return is anticipated. Members of this group must change their legal
status if they wish to reside or work in the host country after the
period of time for which they have been admitted ends. Students,
guest workers, asylum seekers can be included in this category.
These four types of resident have varying rights of access to:
– the labour market, including immigrants’ ability to freely choose a
career, a workplace, or to be self-employed;
– non-contributory social-welfare programmes (cash transfers, child
assistance, housing assistance, healthcare and health-insurance
programmes);
– contributory social-insurance programmes (old-age and pension
programmes as well as unemployment insurance); and
– selected social-investment programmes, such as job training, grants
and loans for higher education, integration assistance, and elementary and secondary education.
The study considers nine countries: the United States, Canada,
Australia, Israel, France, Germany, the Netherlands, Austria and
Britain. I have produced similar results for Sweden, based on information kindly supplied to me by Camilo von Greiff of Sweden’s
Globalisation Council (see Table 2). According to the most common
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typology of welfare states produced by Gøsta Esping-Andersen,
Sweden has a “social-democratic” welfare regime.29 For comparative
purposes, I have also included the results for Germany, which is said
to have a “conservative” welfare regime, and the United States, which
is deemed to have a “liberal” welfare regime (Tables 3 and 4). This is
not the place to discuss the validity of this typology, merely to observe
the differences that exist.
Illegal migrants have scarcely any right to social benefits in any
country – and they may be afraid to make use of any public services,
such as emergency healthcare, to which they may be entitled. Legal migrants’ access to social benefits is also increasingly restricted in
most rich countries. In the United States, the 1996 welfare-reform act
barred legal immigrants (except refugees and those granted asylum)
from all federal means-tested public benefits for five years after entering the country and barred them from Supplemental Security Income (assistance for needy old and disabled people) and food stamps
until citizenship.30 Asylum seekers and temporary workers are denied
access to nearly all social benefits. Although some of these provisions
have subsequently been relaxed, immigrants’ access to social benefits
remains highly restricted.
In Britain,temporary migrants,non-EU labourers and those admitted on
family-reunification visas are not eligible for any social benefits, except housing assistance, for which eligibility varies locally. In France
and Germany, temporary workers are denied most social benefits.
Australia restricts immigrants’ access to social assistance, housing,
healthcare and social security for the first two years. Canada severely restricts temporary workers’ access to most social benefits. Those
sponsoring a visa for a foreign relative have to sign a ten-year contract
making them legally responsible for their food, clothing and shelter
and guaranteeing that the relative will not apply for social assistance.
If sponsors do not stick to their side of the bargain, they can be taken
to court for repayment and their ability to sponsor another relative
is impaired. Even Sweden, which aspires to a quasi-universal welfare
state, places some restrictions on temporary migrants’ eligibility for
welfare benefits (see Table 1).
If Sweden were to allow people from outside the EU to come and
work freely, but policymakers and/or voters were worried that this
29
30
Gøsta Esping-Andersen, The Three Worlds of Welfare Capitalism, Polity, 1990.
United States Congress, Personal Responsibility and Work Opportunity Reconciliation Act of 1996
§401, 411, 432.
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would pose an unbearable burden on the welfare state, the government could at the same time restrict the availability of welfare benefits.
When the British government granted A8 citizens free access to the
UK labour market in 2004, it barred them from claiming most social
benefits for 12 months. Although New Zealanders are free to move to
Australia, since 2001 they no longer have access to social benefits until
they become permanent residents.
Even though welfare migration is a largely irrational fear, it might be
politically expedient, if not ideal, for policymakers to grant foreigners
the right to work but not to claim social benefits. Some will object that
this is unfair, or even immoral: they believe that everyone in Sweden
must be treated equally. That is generally a fine principle, but as we
have seen, it is already breached. When I am paid to come and speak at
a conference in Sweden, I do not expect that it automatically entitles
me to the same social rights as others in Sweden, nor do others object
that I should only be able to work in Sweden temporarily if I gain full
social rights. Why, then, should a desire for conditional equality be
used as an excuse to deny others the opportunity to come and work in
Sweden? It is a peculiar notion of fairness that offers a few lucky foreigners full access to the Swedish welfare state at the expense of keeping
most out. If the price of gaining the right to work in Sweden was not
being able to claim welfare when they arrive, most immigrants would
take it. This does not curtail their rights: nobody is forced to come and
work in Sweden; if migrants would rather stay at home, they are free
to do so. If Swedish voters are unwilling to offer foreigners free access
to its welfare state, why is it wrong to offer migrants the opportunity
of coming to work? Immigrants would not be competing unfairly with
native workers: they would still be subject to the same employment
laws, pay the same payroll taxes, and so on. The only difference would
be in terms of access to social rights.
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5. The economic impact of
free migration
Whatever the terms under which immigrants are admitted, and whatever their net impact on public finances turns out to be, conventional
analysis of the impact of migration on the welfare state is unduly narrow. Migrants contribute to public services and welfare provision not
only as taxpayers, but also as workers. Even if, as critics tend to focus
on, migrants’ babies are born in a local hospital at taxpayers’ expense,
migrants’ net contribution to national healthcare may be positive if
one considers the taxes they pay and the contribution of foreign doctors, nurses, cleaners, hospital porters, security guards and so on.
More importantly, such narrow calculations ignore the often-huge
broader contribution that migrants make to the economy (not to
mention society and culture). If, as a Swede, you were somehow trying to assess your own contribution to Sweden, I doubt you would
solely count the tax you pay. If migration boosts the size of Sweden’s
economy, or more importantly, if it raises natives’ living standards,
then it makes the welfare state more affordable.
Conventional wisdom has it that the net impact of immigration on
the receiving economy is small. The basic standard analysis considers a
labour market where migrants compete directly with – i.e., are perfect
substitutes for – native workers and where the capital stock is fixed.
Not surprisingly, it finds that migrants lower natives’ wages, but that
these losses are slightly outweighed by higher returns to owners of
capital and lower prices for consumers. In this narrow view, migration
mostly involves redistribution from workers to owners of capital and
consumers, with only a small net gain overall.
Yet this model is partial, static and simplistic. In the real world,
migrants are rarely direct substitutes for native workers – because, as
critics of immigration are the first to admit, they are different. Often,
they complement them: think of a foreign childminder who allows a
local doctor to go back to work, where her productivity is enhanced
by hard-working foreign nurses and cleaners. Nor is the capital stock
fixed; on the contrary, it responds rapidly to changes in the labour
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market, especially in a small economy with open capital markets. Nor
is the existing pattern of production given: opening up labour markets permits more efficient specialisation. Above all, the economy is
forever changing, and increased international labour mobility helps it
adapt more readily, as well as making it more dynamic.
The economic case for free migration is analogous to that for free
trade. A global labour market would ensure that labour is allocated
to its most efficient use. It would lead to a finer division of labour,
increased specialisation and economies of scale, reduced prices and increased choice. Over time, it would boost competition, innovation and
enterprise, and thus economic growth. These benefits are potentially
huge. Even ignoring the dynamic gains, studies estimate that creating
a global labour market could double the size of the world economy.31
Just as the freeing up of international trade and finance since the Second World War has helped power a huge rise in living standards across
the world, increased international labour mobility could deliver vast
economic gains over the next fifty years.
This should not be controversial. Most economists agree that free
trade is generally beneficial; the same is surely true of free migration,
since migration is, in effect, a form of international trade. Consider a
European who requires medical care. He could be treated locally by a
European doctor; he could go abroad to be seen by a foreign one; the
foreign doctor could treat him remotely, over the telephone or the
internet, for instance; or the foreign doctor could come to Europe to
treat him. In the last three cases, Europe is importing medical care;
the final case, which we classify as migration instead of trade, is simply
a form of international services trade that involves a foreign provider
coming to Europe to offer his services to consumers on the spot. But
where services have to be delivered locally – old people cannot be
cared for from afar; taxi-drivers have to operate locally; dishes have to
be washed on the spot – international migration is the only form of
international trade that is possible.
As with any form of trade, most of the benefits of migration derive from the fact that migrants are different to natives. Among other
things, they have a different age, skill and education profile, a different
31
Bob Hamilton and John Whalley, “Efficiency and distributional implications of global restrictions on
labour mobility: calculations and policy implications”, Journal of Development Economics 14 (1-2),
61-75, 1984; Jonathon W. Moses and Bjørn Letnes, “The Economic Costs to International Labor
Restrictions: Revisiting the Empirical Discussion.” World Development 32(10): 1610, 2004.
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opportunity set, and a variety of experiences and perspectives. The
main economic benefits of increased international labour mobility to
a country such as Sweden can briefly be categorised as follows:
1. increased innovation and enterprise – because of migrants’ individual efforts and collective diversity – and thus faster long-term
productivity growth;
2. increased competition and dynamism – hard-working foreigners
stimulate greater productivity gains by native workers;
3. increased flexibility and adaptability – just as it is beneficial for
people to move from Gothenburg to Stockholm if their labour is
in demand there, so too from Warsaw or Manila: job shortages can
quickly be met by foreign workers, who tend to be more willing,
once arrived, to move to where the jobs are, and to change jobs as
conditions change;
4. efficiency gains from specialisation and a finer division of labour –
low-skilled foreigners enable Swedes to specialise in higher-skilled
jobs, high-skilled ones permit Swedes to focus on specialities that
they prefer or excel at;
5. economies of scale and scope from a larger population and/or
clustering effects from a greater concentration of certain types of
worker and industry, as in Silicon Valley or the City of London;
6. gains to native labour from complementarities with migrant
labour;
7. gains to capital from complementarities with migrant labour;
8. gains to consumers: lower prices and greater choice.
Other things equal, the benefits of free migration are greater when
labour, product and capital markets are flexible and economic and
cultural barriers to integration low. Set against these benefits are the
short-term losses to labour and capital that are readily substitutable
for foreign labour, and the ongoing costs of adjusting to continual economic change. Both of these costs can be mitigated by an effective
welfare state, which the economic gains from migration can help pay
for.
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The biggest potential gains from migration come from increased
innovation and enterprise, which provide most of the rise in living standards in the long term. The exceptional individuals who
come up with brilliant new ideas often happen to be immigrants.
Instead of following the conventional wisdom, they tend to see
things differently, and as outsiders they are more determined to
succeed. Twenty-one of Britain’s Nobel-prize winners arrived in the
country as refugees. Their contribution is vast – but inherently unpredictable. Nobody could have guessed, when he arrived in the US as a
refugee from the Soviet Union aged six, that Sergey Brin would go on
to co-found Google. Had he been denied entry, and Google not been
founded, America and the world would never have realised the opportunity that had been missed. European governments have doubtless
turned away many potential Brins – not to mention their deterring
ambitious types from trying to come in the first place.
Immigrants’ collective diversity is also vital. Most innovation comes
from groups of talented people sparking off each other – and foreigners with different ideas, perspectives and experiences add something
extra to the mix. If there are ten people trying to come up with a solution to a problem and they all think alike, those ten heads are no better than one. But if they all think differently, then by bouncing ideas
off each other they can solve problems better and faster, as a growing
volume of research shows.32 Just look at Silicon Valley: Google, Yahoo!
and eBay were all co-founded by immigrants who arrived not as
graduates, but as children. Nearly half of America’s venture-capitalfunded start-ups have immigrant co-founders.33 The value of diversity does not apply only in high-tech: an ever-increasing share of our
prosperity comes from solving problems – such as developing new
medicines, computer games and environmentally friendly technologies, designing innovative products and policies, providing original
management advice.
Diversity also provides indirect gains, by acting as a magnet for talent.
Go-getting people are drawn to cities like London and New York
because they are exciting and cosmopolitan. As Richard Florida
See, for instance, Scott Page, The Difference: How the Power of Diversity Creates Better Groups, Firms,
Schools and Societies, Princeton, 2007, as well as Philippe Legrain, Immigrants: Your Country Needs
Them, Little, Brown, 2007, chapter 5.
33
National Venture Capital Association, American Made: The Impact of Immigrant Entrepreneurs and
Professionals on US Competitiveness, 2006.
32
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documents in The Rise of the Creative Class, “Regional economic
growth is powered by creative people, who prefer places that are
diverse, tolerant and open to new ideas”.34
The paradox of productivity growth is that while Sweden’s future
prosperity depends on developing new high-productivity activities
and nurturing existing ones, a large share of future employment will
be in low-skill, low-productivity activities, precisely because such
jobs cannot readily be mechanised or imported. The fastest area of
employment growth in most advanced economies is not high-tech,
but care for the elderly. But if natives are to specialise in highproductivity jobs, and to enjoy more valuable leisure time, immigrants
have to be admitted to do low-skill jobs. Low-skilled migrants are
thus highly beneficial to the Swedish economy.
Low-skilled jobs account for over a quarter of employment in advanced economies, and this is unlikely to fall much in future. The
US Department of Labor, for instance, forecasts that over half of
employment growth in the 25 occupational categories in the United States showing the largest absolute increases between 2000 and
2010 will be in low-skilled tradable services – jobs such as food preparation and service, retail, security guards, waiters, truck drivers,
nursing aides, home health aides, cleaners, labourers, freight, stock
and material movers, landscaping and caretaking, personal and home
care, receptionists, hand packers and packagers. But the supply of
low-skilled workers in Europe is shrinking fast, as less-skilled older
workers retire and younger ones with higher aspirations replace
them. Whereas only 72% of Swedes aged 55-64 have completed
secondary school, 91% of 25-34 year olds have, and high-school
graduates understandably aspire to better things, while even those
with no qualifications do not want to do certain dirty, difficult and
dangerous jobs.35
The growing importance of old-age care neatly captures the broader economic interaction between migration and the welfare state.
The UN Population Division forecasts that the share of Sweden’s
population aged over 60 will rise from 24% in 2006 to 31% in 2050,
with the share of the over-80s – those most likely to need care – rising
Richard Florida, The Rise of the Creative Class: And How It’s Transforming Work, Leisure, and Everyday
Life, Basic Books, 2002.
35
OECD, Education at a Glance 2007, Table A1.2a. http://www.oecd.org/document/30/0,3343,en_264
9_201185_39251550_1_1_1_1,00.html#data Indicator A1.
34
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from 5.3% to 9.6% over the same period.36 But young Swedes generally do not want to work caring for the elderly. To persuade them
otherwise would require a huge wage hike – which, in turn, would
imply pensioners making do with less care, budget cuts elsewhere, or
tax rises. In short, if the growing number of old people are to be cared for properly by native Swedes, spending on the welfare state will
soar, and the economy will suffer, as Swedes are diverted from highproductivity activities that they would prefer. But immigrants face a
different set of alternatives: since wages in Stockholm are a multiple of those in, for instance, Manila, Filipinos are happy doing such
work. This is not exploitation: it makes everyone – migrants, taxpayers, Swedes young and old – better off. It does not undercut wages,
since Swedes do not want these jobs in any case. And it does not
undermine social standards: if there is abuse, legal migrants have
recourse to unions and the law.
Nor does it entail creating a permanent underclass. If migrants are
temporary, as most aspire to be, their point of reference is their home
country – and thanks to their work in Sweden, they return home
relatively well off. If they end up settling, their wages tend to rise
over time as they gain skills, contacts and experience. Their Swedishborn children ought to have the same opportunities as other Swedish
children. If it turns out that some children are left behind, whoever
their parents may be, it is a reason to redouble efforts to ensure equality of opportunity, not to keep out immigrants.
To sum up, the economic opportunities from free migration are
huge, and they could make it easier to pay for the welfare state, not
less.
36
UN Population Division, Population Ageing 2006, http://www.un.org/esa/population/publications/
ageing/ageing2006.htm.
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6. Does immigration undermine
political support for the welfare state?
While free migration might not be an economic problem to the welfare state, some suggest it poses a political challenge. Research by the
political scientist Robert Putnam suggests that in the United States
increased diversity correlates with diminished feelings of trust within
a community.37 Some argue that an increase in diversity through immigration could reduce social solidarity, and thus erode support for
the welfare state. Critics often reason that since ethnically homogeneous Sweden developed a cradle-to-grave welfare state, while the
more heterogeneous United States has only a threadbare social safetynet, an increase in diversity in Sweden will cause its welfare state to
shrivel to be like America’s.
Undeniably, immigration could conceivably pose a political challenge to universal welfare provision. For instance, white Swedes might be less willing to pay for social insurance for blacks – or white
Poles. But the issue is not whether immigration could pose a problem, but whether it does, or is likely to. A simplistic juxtaposition
of Sweden and the United States proves nothing: London and Canada are both incredibly diverse while displaying much greater social
solidarity than more uniform places such as Surrey or Wyoming. There is, in fact, no evidence that increased diversity is undermining the
welfare state. Sweden is now a highly diverse society, yet its welfare
state remains among the world’s most munificent.
It is worth recalling that the driving force behind the establishment
of the welfare state in Europe was not just the concern that socialists
and others had for their poorer fellow citizens – it also came from
enlightened elites who wanted to buy off the masses to stave off a
potential revolution. Even if the rich do not care about the poor, then,
they may still be willing to help them if they fear them. If so, even if
immigration does undermine social solidarity, it need not undermine
political support for the welfare state.
37
Robert Putnam, Bowling Alone: The Collapse and Revival of American Community, Simon & Schuster,
2001.
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The universal welfare state not only provides the rich with security
against the poor – it also provides everyone with security against becoming unemployed, sick or old. Social insurance is not simply a means of providing the poor with, for instance, decent healthcare – that
could be done through a government programme targeted at the poor,
such as America’s Medicaid – it is also arguably a more efficient way
of financing healthcare provision for all. In short, people support socialised medicine not just out of concern that all should have access to
healthcare, but mainly out of self-interest – because they believe a
government-funded healthcare system works out cheaper and better
for them than a private insurance system would. A society with less
olidarity could still support a socialised healthcare system.
The welfare state does not rest on solidarity alone. One may loathe and despise one’s jobless neighbour but still be willing to pay
for unemployment benefits if one fears that one might one day end
up out of work oneself – or if one is terrified that one’s penniless
neighbour might otherwise rob one. Of course, people may be willing to be more generous towards those for whom they feel a sense of solidarity, but this can be based on many things other than
ethnicity. If immigrants are generally seen as honest, fair and hardworking, why should their presence undermine political support
for the welfare state? If young, healthy immigrants are net contributors to strained public finances, and many are looking after Swedes’ elderly grandparents, their arrival will actually make generous
welfare provision, such as higher state pensions, more affordable and
popular.
The particular generosity of Sweden’s welfare state cannot be explained solely by the country’s previous ethnic homogeneity. Swedes
may also tend to be more compassionate than most: Sweden has a
long humanitarian tradition of generous overseas aid and welcoming
political refugees. They may also tend to be more egalitarian and riskaverse than most. But in any case, Sweden is no longer ethnically
homogeneous – one in eight of the population are foreign-born, the
same proportion as in the US – yet the Swedish welfare state has
hardly collapsed so far.
As for the United States, a more plausible reason why it has not
developed a generous welfare state is surely that Americans tend to be
more individualistic and suspicious of government intervention than
most: even the poor believe in self-reliance and the American Dream.
This was true even in the early nineteenth century, when the country was mostly Anglo-Protestant; if anything, today’s more diverse
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America places greater calls on government than the more homogeneous America of yesteryear. The last big expansion of the welfare
state, Lyndon Johnson’s Great Society, took place even as America’s
repressed diversity was bursting into view during the more permissive
1960s. New York, that most diverse city, is also a bastion of high taxes
and government social programmes.
Alberto Alesina and Edward Glaeser, both at Harvard, and Bruce
Sacerdote of Dartmouth College have considered the question “Why
Doesn’t the US Have a European-Style Welfare System?”.38 They
conclude that:
Americans redistribute less than Europeans because (1) the majority believes that redistribution favors racial minorities, (2) Americans
believe that they live in an open and fair society and that if someone
is poor it is their own fault, and (3) the political system is geared
towards preventing redistribution.
But they do not establish a general trade-off between diversity and
solidarity. In truth, there is no obvious correlation between ethnic homogeneity and the size of the welfare state: America is diverse and
has a threadbare welfare state, while Belgium is split between Flemish
and French speakers, but has a developed one; Sweden was ethnically
homogeneous with a big welfare state, while South Korea and Japan
are still ethnically homogeneous, but do not have European-style
welfare states. A comprehensive study of 21 countries concludes:
Despite several such findings for US society, in Europe it was not
confirmed that rising ethnic diversity or even the rate of influx of
foreign citizens had any significant detrimental effects on social
cohesion.39
Alberto Alesina, Edward Glaeser and Bruce Sacerdote, Why Doesn’t the US Have a European-Style
Welfare System?, NBER Working Paper 8524, October 2001.
39
Marc Hooge, Tim Reeskens, Dietlind Stolle, and Ann Trappers, Ethnic Diversity, Trust and Ethnocentrism and Europe: A Multilevel Analysis of 21 European Countries, paper presented at the 102nd
Annual Meeting of the American Political Science Association, Philadelphia, 31 August-3 September
2006.
38
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Another study finds that although social spending did rise more slowly
in countries that saw a big increase in migration between 1970 and
2000:
there is no relationship between the proportion of the population
born outside the country and growth in social spending over the last
three decades of the twentieth century, controlling for other factors
associated with social spending. There was simply no evidence that
countries with large foreign-born populations had more trouble
sustaining and developing their social programs over these three
decades than countries with small immigrant communities.40
In any case, reforms to the welfare state could shore up public
support for it. If new arrivals are seen as a drain on the public purse,
they can be denied social benefits initially. If some people – wherever
they were born – are perceived as lazy or undeserving of assistance,
welfare rules can be tightened up. Welfare systems can also be reformed to increase incentives to work and tie some benefits more closely
to previous contributions.
If the full benefits of free migration are to be realised, people need to
be persuaded that it is a good thing. Voters’ fears, warranted or not,
need to be either challenged or allayed. But free migration need
not undermine political support for the welfare state.
40
The research paper is Stuart Soroka, Keith Banting and Richard Johnston, “Immigration and
Redistribution in the Global Era,” in Pranab Bardham, Samuel Bowles and Michael Wallerstein, eds,
Globalization and Social Redistribution, Princeton University Press and Twentieth Century Fund, in
press. The quote is from Keith G. Banting, Canada as Counter-Narrative: Multiculturalism, Recognition
and Redistribution, paper presented to the panel on Canada’s Contribution to Understanding Rights
and Diversity, Canadian Political Science Association, University of Western Ontario, 2 June 2005.
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7. The impact of Sweden’s proposed
reforms
The Swedish government already allows free migration from the rest
of the EU. It is proposing a radical reform of immigration law in the
latter half of 2008 that would open up more channels for those outside the EU wishing to come to Sweden to work.41 While this reform
falls short of allowing free migration, it would be a big step forward.
The proposals would create a simplified procedure for recruiting
non-EU workers based on labour-market demand that is flexible,
transparent and aims to be sustainable in the long term. Applicants
would need to have received an offer of employment in order to be
granted a work permit. The labour-market test currently conducted
by agencies would be phased out; the employer’s assessment of the
need to recruit from a third country would be a determining factor.
The working conditions, salary and insurance conditions offered with
the position would have to be in line with those offered to nationals.
Work permits would be extended for up to four years, at which
point migrants would be able to apply for permanent residency. No
labour migrant would be forced to return home as long as he or she
had a job. Those whose employment ceased would be able to stay in
Sweden and seek a new job for a three-month period.
The reform would also make it easier for a third-country citizen who
fulfils the basic requirements for a Schengen visa to visit Sweden to
attend, for example, an employment interview. Were a third-country
citizen offered a job, it would be possible, in certain cases, to apply for
a work permit from within the country. The government also intends
to enable foreign students who have completed one term of a highereducation course, or one term as a guest student at postgraduate level,
to apply for work permits from within the country.
41
Email from Sweden’s Ministry of Justice.
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As far as I understand, the government’s proposed immigration reform involves no change in welfare entitlements for prospective immigrants, so Table 2 will still apply. Migrant workers would be able
to obtain social benefits as soon as they had a national registration
number. If they qualified, they would be entitled to unemployment
benefits for up to three months if they lost their job.
The reforms would appear likely to boost public finances.
They would enable Swedish businesses to meet their employment needs, and thus Swedish consumers to obtain the goods and
services they desire. They would boost the Swedish economy through greater specialisation as well as through complementarities
between foreign labour, native labour and capital. Over time, they
could also bolster innovation. Since migrants would be able to come
to Sweden only if they had a job offer, the potential for welfare
migration is negligible. So long as migrants remain in work, they will
tend to be net contributors to public finances – and if economic
growth is faster, the welfare burden will fall.
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8. Conclusion
Free migration could bring huge economic benefits to Sweden
– and the world – just as free trade does. But Sweden’s universal,
residence-based welfare state is certainly a complicating factor.
While it is highly unlikely that people will migrate with the explicit aim of claiming welfare, poorer immigrants may end up a
burden on public finances, especially if labour-market restrictions
and other factors make it hard for them to find jobs, while generous social benefits make it possible to survive comfortably without
working. The solution is four-fold: first, put new emphasis on policies to combat discrimination and ensure equality of opportunity;
second, reform labour markets to increase flexibility and employability; third, enact welfare reforms which minimise disincentives to
work; four, separate open access to the labour market from the allocation of social rights. The first three are desirable in any case; the
fourth, while not ideal, may be politically expedient.
In so far as migration is increasingly temporary in a global economy where the pattern of supply and demand is forever changing
and the costs of mobility continue to fall, the matter ends there.
But when migrants end up settling, and acquiring full social and
political rights, broader political questions arise, notably whether
a more ethnically and culturally diverse Sweden is willing to continue supporting a generous welfare state. The evidence so far suggests it is; as does international experience. There is no reason why
a more diverse Sweden should adopt American attitudes to the
welfare state. More broadly, the case for free migration and greater
diversity must be made at a political level. Voters must be persuaded that migration is an opportunity, not a threat. It is a matter of
human rights and humanitarianism as well as self-interest. Ultimately,
the choice is between an open, dynamic and progressive society, and a
closed, stagnant and reactionary one.
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Table 2. Summary of benefit eligibility in Sweden42
Safety net
Status
Social insurance
Social investment
Educatiion for
children
Job
training
Access
to labour
market
yes
yes
yes
open
yes
yes
yes
yes
open
yes
yes
yes
yes
yes
open
yes
yes
yes
yes
yes
yes
open
limited48
no
no
no
restrict
-ed49
yes
limited
open
restricted54
restricted55
yes
restricted56
yes
yes
restricted57
limited58
Social
assistance
Rental
assistance
Public
housing43
Child
assistance
Healthcare and
insurance
Old-age Unemploy- Integrati- Educatpensment in- ion assistion
ion44
surance45
ance
Citizens46
yes
yes
na
yes
yes
yes
yes
yes
EU citizens
yes
yes
na
yes
yes
yes
yes
Permanent/
long-term
residents
yes
yes
na
yes
yes
yes
Recognised
refugees
yes
yes
na
yes
yes
limited
limited47
na
limited
restricted51
restricted52
na
restricted53
Presumptively
permanent
Presumptively
temporary
Asylum
seekers
Temporary
migrants
and visitors50
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Sources are Sweden’s Ministry of Education and Research: interviews with representatives from
different departments; Swedish Migration Board: inquiry answer and different publications;
Swedish Social Insurance Agency: inquiry answer and different publications. Note that cross-country
comparisons are difficult due to the possibility of different understanding of the definitions. The
answers should therefore be interpreted with some caution.
43
Strictly speaking, there is no public housing in Sweden. However, immigrants can stay for free in
refugee camps and some apartments outside the camp that belong to the Immigration Board.
44
For those who work in Sweden.
45
For those who work in Sweden and fulfil the requirements that apply to Swedish nationals
(previous employment for a certain time, and so on).
46
These benefits are available to EU citizens who have joined the permanent labour force, not to
visitors or travellers.
47
Means-tested: those who cannot afford rent can live for free in a refugee camp.
48
Adults: only emergency situations; children: full access.
49
Only training in Swedish in refugee camps.
50
Excluding tourists.
51
Individuals with national registration: yes; individuals without national registration: no.
52
idem.
53
Individuals with national registration and parents with a residence permit: yes; individuals without
national registration: no.
54
Individuals with national registration: yes; individuals without national registration: no.
55
idem.
56
idem.
57
idem.
58
Guest students: yes; visitors: no.
42
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Table 3. Summary of benefit eligibility in Germany59
Safety net
Status
Social insurance
Social investment
Educatiion for
children
Job
training
Access
to labour
market
yes
yes
yes
open
no
yes
yes
yes
open
yes
no
yes
yes
yes
open
yes75
no
yes
yes
yes
restricted76
yes
no
yes
yes
yes
open
no
yes
no
yes
yes
no
very
limited80
no83
no84
no
no
no
no
closed85
Social
assistance
Rental
assistance
Public
housing
Child
assistance
Healthcare and
insurance
yes
yes
yes
yes
yes62
yes
yes
na
yes
yes
no
yes
yes
yes
yes
yes65
yes66
yes67
yes68
yes69
yes
yes71
yes
yes72
yes73
yes74
yes
yes
yes
na
yes
yes
yes
Asylum
seekers77
very
modest78
yes
yes79
no
care only
Temporary
workers81
no
no
no
no
emergency
care only82
Citizens
EU citizens
63
Old-age Unemploy- Integrati- Educatpensment in- ion assistion
ion60
surance61
ance
Presumptively
permanent
Unlimited
residence64
Limited
residence70
Recognised
refugees
Presumptively
temporary
emergency
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Michael E. Fix, Laureen Laglagaron, Social Rights and Citizenship: An International Comparison,
Urban Institute, August 2002, Table 5 http://www.urban.org/url.cfm?ID=410545
After being employed for a certain time.
61
idem.
62
For employed, registered unemployed and their families.
63
For those who have joined the labour force, and their spouses.
64
This permit can be acquired at the earliest after 8 years of residence.
65
Use of social assistance or even fulfilling the conditions for it (i.e., lack of means) by non-citizens who
have an ordinary (limited) permit may result in non-renewal of residence permit. But even for holders
of an unlimited residence permit, the range of types of assistance to which they have a legal claim is
limited; all other types of assistance may be granted ”insofar as it is justified in the individual case at
hand”.
66
Only with a certain type of residence permit. Does not count as own income during residence permit
renewal process. Lack of sufficient income can lead to non-renewal of residence permit.
67
No discrimination against non-citizens with respect to access to publicly subsidised housing.
68
Only with a certain type of residence permit. Does not count as own income during renewal process.
Lack of sufficient income can lead to non-renewal of residence permit. Not for children living abroad.
69
For employed, registered unemployed and their families. No health insurance for family members
living abroad.
70
May be limited or unlimited, can be acquired at the earliest after 5 years of residence.
71
Use of social assistance or even fulfilling the conditions for it (ie, lack of means) by non-citizens who
have an ordinary (limited) permit may result in non-renewal of residence permit. But even for holders
of an unlimited residence permit, the range of types of assistance to which they have a legal claim is
limited; all other types of assistance may be granted ”insofar as it is justified in the individual case at
hand”.
72
No discrimination against non-citizens with respect to access to publicly subsidised housing.
73
Only with a certain type of residence permit.
74
For employed, registered unemployed and their families. No health insurance for family members
living abroad.
75
If unemployed for more than a year and the Federal Employment Agency determines that the
individual will not be able to find a job, the claim may be denied. Turkish nationals not subject to this
scrutiny.
76
Restricted to occupation, occupational field or contract. Holders of an unlimited permit are free to
take up any employment.
77
If asylum proceedings take longer than a year, asylum seekers are entitled to benefits according to the
federal law on welfare.
78
Only asylum seekers and de facto refugees receive limited in-kind social assistance instead of cash
assistance.
79
Asylum seekers must be housed by local authorities while their asylum application is pending.
80
Non-EU members can only accept a job if no German, EU member or migrant with equal status can
fill the position.
81
Project-tied or seasonal.
82
Contract labourers may not claim social insurance benefits because they should be insured in their
home country. However, they may claim emergency medical care, if necessary.
83
Contract labourers may not claim social insurance benefits because they should be insured in their
home country.
84
idem.
85
Non-EU members can only accept a job if no German, EU member or migrant with equal status can
fill the position.
59
60
IS FREE MIGRATION COMPATIBLE WITH A EUROPEAN-STYLE WELFARE STATE?
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Table 4. Summary of benefit eligibility in United States86
Safety net
Status
Social insurance
Social investment
Jobtraining
Access
to labour
market
yes
yes
open
yes
yes
yes
open
yes
yes
yes
yes
open
yes
yes
yes
yes
yes
open
SSI/
Food
Stamps
TANF
State/
local publ.
benefit
Housing
assistance87
CHIP
Medicaid
Social
security
yes
yes
yes
yes
yes
yes
yes
yes
yes
Legal
permanent
residents
no
not first
5 years,
then state
option
state
option
yes
not first
5 years,
then
eligible
not first
5 years,
then state
option
yes
yes
Legal
permanent
residents88
not first
5 years,
then
eligible
not first
5 years,
then state
option
eligible
yes
not first
5 years,
then
eligible
not first
5 years,
then state
option
yes
Recognised
refugees
eligible
first 7
years
not first
eligible
5 years,
first 5
then state years, then
option89
state
option
yes
yes
not first
7 years,
then state
option90
Citizens
Unemploy- Higher
Education
ment in- education
for
surance for children children
Presumptively
permanent
Presumptively
temporary
Asylum
seekers
no
no
no91
limited92
no
no93
no
no
no
yes
no
restricted94
Temporary
workers
no
no
no95
limited96
no
no97
no
no
sno
yes
no
restricted98
46 • EXPERT REPORT TO SWEDEN’S GLOBALISATION COUNCIL
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Michael E. Fix, Laureen Laglagaron, Social Rights and Citizenship: An International Comparison,
Urban Institute, August 2002, Table 9 http://www.urban.org/url.cfm?ID=410545.
Rental assistance and public housing.
88
With 40 quarters of work.
89
Refugees are given Refugee Cash Assistance for their first 8 months in the US if they do not qualify
for Temporary Assistance for Needy Families (TANF).
90
Refugees are given Refugee Medical Assistance for their first 8 months in the US if they do not
qualify for Medicaid.
91
States may provide state and local public benefits to unqualified immigrants only if they pass a law
after 22 August 1996.
92
Time limit of 18 months unless living with a citizen or a legal permanent resident.
93
Emergency care only.
94
Asylum seekers are barred from the labour market for 180 days. After this time period, employment
authorisation is subject to Immigration and Naturalization Service approval.
95
Refugees are given Refugee Cash Assistance for their first 8 months in the US if they do not qualify
for TANF.
96
Time limit of 18 months unless living with a citizen or a legal permanent resident.
97
Emergency care only
98
Restricted to employer or occupational field.
86
87
IS FREE MIGRATION COMPATIBLE WITH A EUROPEAN-STYLE WELFARE STATE?
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48 • EXPERT REPORT TO SWEDEN’S GLOBALISATION COUNCIL
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08-04-08 17.04.03