Migration and the Nordic Welfare Model

Abstract

Migration is vividly considered to be a particular challenge for extended welfare states like the Nordics since high taxes and entitlement to the social safety net and provision of welfare services may create both pull and push effects in migration. The financial viability of the model is challenged if immigrants tend to be net beneficiaries and emigrants net contributors to the welfare arrangement. Critical for this issue is the labour market performance of migrants. The experience of the Nordic countries is reviewed, and the possibility of reconciling the welfare model with migration is discussed, focusing in particular on employment and public finances. Policy responses to protect welfare systems by introducing conditionalities in the social safety net based on residency and employment, as well as differentiated and selective immigration rules, are discussed.