The welfare state helps refugees

The year 2015 brought a massive influx of migrants from crisis areas to Europe. As a result, various voices were heard: some who believe that immigration to the welfare state must be stopped, otherwise its capacities would be overloaded; and the others who think that immigration should be judged positively across the board, also for the welfare state, if you look at the demographic development in Austria and consider that immigrants not only receive benefits, but also pay into the welfare system.

What's right now?

We asked ourselves that too. Around 2015, a number of studies were carried out in Austria, Germany and Switzerland that dealt with the question of how immigration affects the welfare state. The main focus was on the financial and macroeconomic consequences of immigration as well as on the integration potential in the labor market. However, the results of these studies differ. And fundamentally. Often neither positive nor negative consequences of immigration are identified; instead, different assumptions are based on different scenarios and forecasts. We have therefore decided to commission another study: one that gives us an overview of all the others - with the aim of being able to answer the question of whether immigration in our social system is to be assessed positively or negatively. The study was carried out in consultation with WU and the Wittgenstein Center for Demography and Global Human Capital and focused on asylum seekers, persons entitled to asylum and refugees.

There is no straight answer

However, we were soon informed by the authors of this meta-study that there is no clear answer on this meta-level either. On the one hand, the relevant data that are needed to make clear statements are partly not (yet) available or not accessible. Many of the studies examined do not clearly differentiate in their analysis between the different groups of migrants. The quality of the studies also varies: especially those commissioned by public institutions, foundations or companies were often not subjected to in-depth external evaluation or peer review.

The question of how immigration affects the welfare state - positively or negatively - can therefore not be answered, at least not based on facts. The answer depends on a number of basic assumptions, most notably the socio-economic characteristics of the migrants and conditions in the host country. In any case, three main results of the meta-study can be highlighted:

  • Almost all of the studies examined in the meta-study emphasize the importance of human capital as the main factor in successful labor market integration; this includes both educational level and professional qualifications. How this is dealt with ultimately always depends on political measures.
  • The funding and evaluation of studies in this area require further consideration.
  • The results of the analyzed studies vary substantially with regard to various characteristics such as nationality, legal status or gender of the migrants.