Does immigration erode welfare states?
For many decades, researchers have debated the effects of immigration on welfare states. According to one hypothesis, immigration erodes the welfare state. Primarily, this reflects the declining willingness of natives to fund people who are ‘not like them’. Certain evidence supports this argument, the most notable emerging at the start of the 2000s. At this time, Alberto Alesina and colleagues demonstrated that welfare spending declined as populations became more diverse. But other work, much of which is recent, contradicts this argument. Interestingly, such accounts often emphasize path dependent elements of welfare states, arguing that immigration entails greater investment in welfare states.
Much has been written about this and there is little point revisiting core disputes. Rather, analysis of this debate offers an opportunity to evaluate two concerns of my Substack: i) the capacity of the social sciences to generate coherent findings and ii) whether the liberal sympathies of researchers distort findings. As we will see, these issues are interlinked.
There have been hundreds of studies of the effects of immigration on welfare states, researchers examining diverse welfare programmes and countries. Having read this literature whilst working on a broader review of new cleavages and policy outcomes, I would conclude that although immigration does not unambiguously erode welfare states, certain patterns of immigration bolstering welfare, immigration tends not to help welfare states. Too many studies support the erosion argument and it makes theoretical sense, ethnically diverse societies having more points of tension. This conclusion doubtless reflects my sympathies; I am ambivalent about immigration, appreciating arguments on both sides. But other conclusions are legitimate; in a literature review, Stichnoth and Van der Straeten argued that evidence for the erosion hypothesis was ‘mixed at best’.
Obviously, ambiguous conclusions are not always alarming. Researchers are divided on many topics, disagreement and ambiguity being central to academic life. But as I have written previously, there is a replication crisis in academia, researchers analysing single datasets yet coming to multiple interpretations. And given the repeated studies of immigration and the welfare state and narrow question – contrast, for example, with broad debates about ‘nature v nurture’ – one might hope that this debate would yield clearer answers. We know that researchers can draw multiple conclusions from single datasets; reality affords infinitely more opportunities to cherry-pick findings. Resultingly, we may worry that many findings do not reflect reality, but alternative drivers.
One driver is demand for specific arguments. As I have written before, the spatial hypothesis states that the existence of gaps in research agendas drives output, akin to markets in classic economic theory. To some extent, literature on immigration and welfare validates the spatial hypothesis. In the early 2000s, much literature argued that immigration was eroding welfare states; whilst this reflected reality, there was also ‘demand’ for such work, entailing status and money for authors. But as this argument became established, there was demand for opposing positions. Within sub-sections of the debate, similar processes occurred. Obviously, spatial influences are not all-powerful; consensuses exist in all fields. Yet when data are more ambiguous, opinions seem to fragment.
There are related questions about liberal bias. Support for immigration is central to contemporary liberalism, making this topic a key test of the bias hypothesis. As we have seen, spatial pressures on research outcomes are powerful; conceivably, they might overcome analytic coherence and liberal biases! Whilst I agree that spatial influences are most important in this case, the ideologies of researchers should not be dismissed. As I have observed previously, spatial influences are not fully efficient, entailing many ways for bias to enter literature. Given the preponderance of liberals in academia, it seems fair to conclude that literature on immigration and the welfare state exhibits some bias. Liberals who doubt this should invert the question. When conservative economists investigated Thatcherite economic reforms, was their output impartial? Were more conservatives researching immigration and welfare, I doubt that there would be a consensus, yet conclusions would probably be more sympathetic to the conservative position.
Notwithstanding an abundance of literature, breakthroughs in the immigration and welfare debate seem unlikely. Some will be frustrated; given the restricted scope of this question and the political relevance, the profuse literature might be expected to yield a clearer answer. Alas, the complexity of reality, publishing incentives and potential bias lead to an impasse! This will delight some, the intricacies of intellectual challenges being endlessly stimulating, but for others, it will compound irritation.
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Good point. The different scenarios have different implications as to the erosion scorecard, and allowing potentially big contributors in adds up as such a clear win-win that few can argue against it. But the other group is a another matter entirely. I was brought up in a conservative Republican family but my political convictions changed years ago thanks to the callous attitude of the GOP re undocumented immigrants from Mexico and Central America. They projected an unseemly and reactionary alarmism at the laughable notion that genuine democracy in El Salvador might produce a government that posed a threat to the USA. When the Cold War ended they conveniently forgot about that absurdity; the Iran-Contra scandal had recently exposed their duplicity and bad judgement. (One of the painful ironies attendant to it all was the conflict within American Catholicism re ‘Liberation Theology,’ which had posited the radical notion that JC might’ve found unfettered exploitation of Salvadorans, Hondurans, et al inconsistent with his ethos.) Years later staunch liberals in the Obama admin. proved apathetic when an illegal (albeit bloodless)coup deposed the democratically elected president of Honduras. So American leadership in both parties has proven unreliable in attending to principled policy toward our southern neighbors. Meanwhile they both joined in a long term effort to de-regulate high finance, and we were rewarded with an ugly housing bubble and disappointment in efforts to bring the people responsible for it to account. So the poor buggers from the banana republics flock north hoping to score a gig pushing a lawn mower for $3 bucks an hour and the folks here who might’ve worked on a production line that was long ago off-shored by corporate HQ resent them for it. One of the few ‘legit’ industrial openings for the economic refugees from Mexico/Cen Am is the lovely occupation of slaughterhouse worker. It’s a testament to some of our better angels that they have managed to begin carving a niche for themselves in that line (no pun intended), and I have it on reliable authority that, in my former Midwestern home state of Nebraska, anyway, they are getting along fine with the locals and are happy to be there. But meat packing has, like so many other businesses, been transformed by contemporary capitalism for the worse. The results are well documented in an excellent book: “Methland”. The title just about says it all. So maybe the upshot of it on this side of the pond is that we should take better care of our own, but if we’re going to keep the 3rd world safe from democracy we’ll owe its residents whatever decency we’ve got left to offer. Unfortunately I can’t find any conventional American pols who I can trust to work along those lines.
I think a great way to settle the discussion is to look at unemployment rates for immigrants. In my home country of Sweden, roughly 20% of those that are born overseas are unemployed vs just 5% for the native population. Regardless of whether those unemployed are engaged in black market jobs or rely on social security, they still pose a burden to society in my view.
I've research elsewhere that immigrants to the United States have a neutral effect on the job market. That makes intuitive sense. The problem with Nordic welfare systems seems to be massive hurdles to enter the local job market as well as segregation making it difficult to learn the local language and adjust to society and the job market. The incentives to work in welfare states are sometimes distorted as well.
I'm pro-immigration, but the combination of a welfare state with poor integration of newcomers can cause significant problems, and at the end of the day, the new immigrants are getting the short end of the stick. The Nordic welfare state model needs to be adjusted.