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Online Department Seminar: Closing the gaps: the positive effects of welfare inclusion on immigrants’ labor market integration

Anil Duman
Wednesday, April 21, 2021, 1:30 pm – 3:10 pm

Our chapter examines the effects of welfare inclusiveness on the labor market integration of migrants in host countries. We situate this research in the existing debate about the role of welfare states and social policies in immigrant integration. While some scholars have theorized that inclusionary approaches are most conducive to successful integration because they maximize the equality of opportunity of immigrants and native-born citizens, others have argued that inclusive approaches discourage especially newcomers from becoming economically active. By using a novel IESPI (Immigrant Exclusion from Social Programs Index) dataset, which measures welfare inclusiveness towards immigrants based on measures of formal rules and legislation, we evaluate the relative merits of these competing hypotheses. To this purpose, we compile longitudinal data covering 19 developed countries over a period of three decades (1990-2019) and examine labor market integration in terms of native immigrant gaps in labor force participation and unemployment rates. Our findings reveal that inclusiveness of social policy decreases native-immigrant labor force participation gap and increases unemployment rate gap. Hence, inclusive welfare approaches not only foster equality of opportunity between migrants and native-born citizens but also lead to more favorable outcomes for immigrants. Nevertheless, we also find that the integration effects of the inclusiveness of social policy vary across programs. While greater inclusiveness of some instruments has an enabling role on immigrants with regards their labor market integration, others may be trapping them in welfare or enabling native-born citizens more, who on average tend to command greater economic and social resources to gain advantage in the labor market.

Anil Duman (CEU), Martin Kahanec (CEU and CELSI), Lucia Mýtna Kureková (Slovak Academy of Sciences)