Immigration and Welfare State Cash Benefits - The Danish Case: Study Paper No. 33

This paper summarizes the existing evidence on welfare dependence among immigrants in Denmark, focusing on immigrants from non-Western countries. The paper contains an overview of the background regarding immigration in recent decades, followed by a survey of relevant benefit programs in the Danish welfare state. The evidence focuses on: macro analyses of the overall impact from immigration on the public sector budget, micro-oriented studies on specific welfare programs, the importance for welfare dependence of demographic variables, the big variation between countries of origin, and the importance of cyclical factors at the time of entry and during the first years in the new country. Evidence from the most recent years reinforce the importance of aggregate low unemployment, in contrast to fairly small effects found from policy changes intending to influence the economic incentives between welfare and a job for immigrants.