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Assimilation to a Welfare State: Labor Market Performance and Use of Social Benefits by Immigrants to Finland

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  • Sarvimäki, Matti

Abstract

Abstract: I study the assimilation of immigrants to the Finnish labor market and welfare system. The initial immigrant-native earnings gaps are large. While longterm immigrants experience a rapid earnings growth, only men from OECD countries converge to natives' earnings. Among all immigrant groups earnings grow predominantly due to improving employment rates rather than wage growth. Earnings profiles for temporary immigrants are flat. Furthermore, direct study of the use of social benefits suggests that immigrants learn to use the welfare system gradually. In particular, non-OECD households substantially increase their use of social assistance during their first five years in the country despite simultaneously doubling their earnings. JEL classification: J61, J31, F22

Suggested Citation

  • Sarvimäki, Matti, 2008. "Assimilation to a Welfare State: Labor Market Performance and Use of Social Benefits by Immigrants to Finland," Discussion Papers 454, VATT Institute for Economic Research.
    • Handle: RePEc:fer:dpaper:454
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    File URL: https://www.doria.fi/handle/10024/148444
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    More about this item

    Keywords

    Immigrants; assimilation; welfare state; social benefits; Labour market; Työmarkkinat; Social security; Sosiaaliturva; Labor market and policies promoting economic growth; Työmarkkinat ja kasvua tukeva politiikka;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration

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