The Fiscal Burden: Immigration and the Welfare State

• In Event: The Political Economy of Immigration

Abstract

Natives are very often exposed to negative claims about immigrants, especially during political campaigns. One of the claims to which citizens are more exposed stresses that immigrants pose a net fiscal burden on the receiving country by relying too much on welfare services and not paying enough taxes. Despite the existence of evidence that questions this claim, we see that most individuals in Europe perceive that immigrants receive more than they contribute. In the present paper, we aim to contribute to the literatures on attitudes towards immigrants and preferences for redistribution by examining whether the perception of the potential costs of immigration affects citizens’ willingness to grant social rights to immigrants. Unlike most studies on immigration, we prefer to put the focus on preferences towards including immigrants into the welfare state rather than just analysing attitudes towards letting them enter the country, given that recognising some basic rights to immigrants (i.e., the right to enter a country) is not enough to guarantee that they enjoy decent standards of living. The empirical section of the paper is divided in two parts. In the first part, we employ cross-sectional data from the European Social Survey. We find that negative perceptions of the contribution of immigrants are associated with a higher opposition to granting social rights to them. We also find that individuals that believe that the health care system in their country will be unsustainable in ten years are more likely to oppose recognising social rights to immigrants. In the second part, with the aim of disentangling causally the fiscal burden argument from other arguments present in the literature, we implement a conjoint analysis in Spain, France and the UK where we manipulate different attributes of immigrants and ask respondents to choose between two profiles of immigrants which one should be granted full social rights. We find that individuals are in all three countries significantly less likely to support granting full social rights to immigrants that contribute less than they receive in welfare services in the receiving country. The penalty for being a negative contributor is so big that it is not compensated when immigrants are presented as being very hard-working or fluent speaking the language of the receiving country. Interestingly, the effect is uniform across levels of education and income. To explore the mechanism more thoroughly without contaminating the conjoint task, we ran a survey in Spain two weeks before the implementation of the conjoint in which we asked respondents more specific questions about immigration and the welfare state. We find, in line with our cross-sectional results, that individuals concerned about the sustainability of the health care system are more responsive to the information about the negative contribution of immigrants. Finally, we also see that individuals that think that immigrants enrich culturally their country are not more indulgent when it comes to granting social rights to immigrants that are negative contributors. Overall, this paper contributes to the literature by showing that individuals are extremely sensitive to information about the potential cost of immigration.

Authors

• César Fuster Llamazares

• Francesc Amat, University of Barcelona, Gran Via de les Corts Catalanes 585 08007 Barcelona