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The Nordic Welfare Model in an Open European Labor Market

Author

Listed:
  • Bratsberg, Bernt

    (Ragnar Frisch Centre for Economic Research)

  • Røed, Knut

    (Ragnar Frisch Centre for Economic Research)

Abstract

Is it possible to sustain an ambitious and redistributive Nordic welfare state in a Europe with open borders? Drawing on longitudinal administrative records spanning four decades, we first present discouraging historical evidence showing that labor migrants from low?income source countries tend to have unstable employment careers with marked overrepresentation in welfare programs. This pattern extends to post?accession labor migrants from Eastern Europe, who quickly experience high rates of unemployment. The article discusses possible avenues for making the welfare state "migration robust." We argue that there are alternatives to reclosing borders and/or cutting down welfare state ambitions, and recommend policies based on strengthening of activity requirements in social insurance programs, raising minimum job standards, and substitution of work?oriented services for cash?based family allowances.

Suggested Citation

  • Bratsberg, Bernt & Røed, Knut, 2015. "The Nordic Welfare Model in an Open European Labor Market," IZA Policy Papers 109, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izapps:pp109
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    Cited by:

    1. Willén, Alexander & Willage, Barton & Riise, Julie, 2022. "Employment Protection and Child Development," Discussion Paper Series in Economics 19/2022, Norwegian School of Economics, Department of Economics.

    More about this item

    Keywords

    EU enlargement; social insurance; labor migration;
    All these keywords.

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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