Study Busts Myth of Welfare Magnet Migration
Stereotypes and the narratives that accompany them are often hard to dispel. But Martin Kahanec, associate professor in CEU's Department of Public Policy, is using statistical analysis to quell the widely held belief that immigrants move to countries that offer liberal welfare benefits in order to abuse social systems. Kahanec and three colleagues from the Institute for the Study of Labor analyzed data from 1993 to 2008 from 19 EU countries including reports on migration flows, gross domestic product, unemployment, and expenditures on unemployment benefits.
“All estimates for immigrants of EU origin indicate that flows within the EU are statistically not related to unemployment benefit generosity,” Kahanec says. “This suggests that the so-called 'welfare migration' debate is misguided and not based on empirical evidence. Immigrants are not shopping for welfare.” In fact, other factors like unemployment rates, level of gross domestic product, and existing social contacts in the country of destination have a much stronger effect on the flow of migration than welfare benefits.
These findings are confirmed when non-EU immigrants are examined. Although there appears to be a positive correlation between unemployment benefit generosity and flows of non-EU migrants, an innovative approach using elaborate statistical techniques show that this correlation is not due to the “welfare magnet” effect. Rather, there is evidence that countries that receive significant numbers of immigrants actually became more generous with welfare and social programs as a result of the population increase.
Another possible explanation for the positive correlation for non-EU immigrants is their slow adjustment in host labor markets leading to higher dependency on welfare, and thus increased social expenditures resulting from immigration. The group's statistical analysis in a related project showed that when comparable groups of natives and immigrants were measured (in terms of age, level of education, and other factors), immigrants’ rates of unemployment benefit receipt were not higher and, in several EU countries, they were even lower than those of the natives.
Based on these results, the authors argue that the key policy issue is not migrants’ abuse of welfare or any inherent tendency of immigrants to receive excessive welfare support. They see the problem lying in Europe’s inability to manage procedures to ensure that immigrants adjust swiftly.
“In terms of policy, there should be a paradigm shift in this discussion – away from the policing of immigrants,” Kahanec says. “We shouldn't be talking about abuse but rather about access. A well-designed immigration policy should include full access to labor markets and social programs for well-qualified immigrant workers. Adjustment of immigrants whose skills do not match those demanded in the host labor market should be facilitated through education and training.” Access-focused policies would increase the innovation potential and dynamics of European economies, Kahanec says, while alleviating their demographic problems.
Photo: CEU/Daniel Vegel
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