Lower labor market participation and greater extent of welfare dependency among non-Western immigrants, compared to comparable natives, is common in Western welfare states. A first glance at immigrant-native employment gaps, suggests that the Central-European and Anglo-Saxon countries generally have smaller gaps than social democratic states such as Sweden, Denmark and the Netherlands. This thesis seeks to understand why there are such differences across welfare states present, and how the welfare state affects immigrant labor market integration.
In order to answer these questions, I provide a survey of the literature to find out if it is possible to say something general about welfare state organization and labor market integration of non-Western immigrants. I find a tentative pattern in the literature, that to some extent confirm the ruling perception: When observable characteristics are controlled for, the gap in immigrant-native employment is often larger in social democratic countries, than in conservative Central-European states and English-speaking countries. This is to some extent caused by the welfare organization, although many other factors contribute to this result. Within a welfare modeling framework, I argue that welfare states, with their different welfare organization, integration and immigration policies, and labor market structures, influence immigrants’ labor market integration.
The structure is as follows: Section 1 provides an introduction to the problems in question. Section 2 reviews some basic terminology and background topics. In section 3, the topic of how the welfare state affects immigrant labor market integration is surveyed: First, the welfare state can create welfare migration depending on the generosity of the welfare state and on immigration policies. Second, the labor market structure of the welfare state influences immigrant integration. Third, integration policies create different outcomes across countries. At last, I will look at two studies examining one immigrant group’s outcomes in two welfare states. In section 3, some further topics are addressed. These issues concern the importance of language skills, ethnic ties and self-employment.