The political economy of immigration and welfare state effort: evidence from Europe

This article explores whether immigration plays a role in determining national welfare state effort in 16 European countries. It examines the relationship between stocks of migrants, the foreign-born population, on two different indicators of welfare state effort - social welfare spending as a percentage of gross domestic product (GDP) and a welfare generosity index. The nexus between immigration and welfare is a controversial and highly sensitive political issue, and as such it typically divides opinion. Traditionally, it has been argued that increases in immigration create pressures for governments to reduce levels of social welfare provision. By building on theories and results from the political economy literature, this article provides further evidence on the debate through using a fresh approach to operationalize welfare state effort. The empirical results show that the foreign-born population has a positive and statistically significant relationship with social welfare spending and no statistically significant association with the welfare generosity index. The findings provide no evidence to support the hypothesis that the higher levels of immigration lead to reduced levels of social welfare provision. On the contrary, these findings lend support to the view that increasing immigration leads to welfare state expansion rather than retrenchment, and that European welfare states remain resilient in the face of the globalization of migration.