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Social Insurance Design and the Economic Integration of Immigrants

Link to article:

[DOI] [PDF]

Authors:

Bratsberg, Bernt, Oddbjørn Raaum, and Knut Røed

Year:

2019

Reference:

Bokkapittel
In Lars Calmfors and Nora Sánchez Gassen (eds), Integrating Immigrants into the Nordic Labour Markets. Copenhagen: Nordic Council of Ministers, pp. 133-158.

Summary

Social insurance design balances equality and social security against moral hazard. We discuss whether the optimal balance is influenced by immigration and point to two potential reasons. First, immigrant labour supply might be particularly sensitive to social insurance parameters. Second, social insurance generosity may directly impact migrant inflows. We provide evidence for both mechanisms. Still, we do not find that such evidence defends reduced social insurance generosity or tighter regulations on migration. Instead, we call for a more activity-oriented social insurance policy. Activation requirements in the Norwegian social assistance programme seem to reduce immigrant welfare dependency and raise immigrant employment.

Project:

Oppdragsgiver: NFR via ESOP
Oppdragsgivers prosjektnr.: 227072
Frisch prosjekt: 1182 - European Strains

Oppdragsgiver: ASD
Oppdragsgivers prosjektnr.: ASD 1214 Opsahl
Frisch prosjekt: 1370 - Effects of labour migration