Epstein, Gil S. () (Department of Economics, Bar-Ilan University, Israel, CEPR, London and IZA, Bonn) Hillman, Arye L. (Department of Economics, Bar-Ilan University, Israel, CEPR, London)
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The social contract of the welfare state can be strained by the arrival of immigrants who receive welfare payments financed by citizens’ taxes. We show, however, that the presence of unemployed immigrants receiving welfare payments is consistent with social harmony. The social harmony, which is a consequence of a view of unemployment as a labor-market discipline, contrasts with the social conflict predicted by Karl Marx when he proposed his earlier version of the same explanation for unemployment. We demonstrate that a socially harmonious policy is always feasible. Outcomes without social harmony can therefore always be suitably amended.
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
168.
Find related papers by JEL classification: I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs F22 - International Economics - - International Factor Movements and International Business - - - International Migration P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
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