Immigration and the conditionality of unemployment benefits in OECD countries

Abstract

Advanced welfare states have placed more conditions on the receipt of social protection. This study examines the link between the strictness of unemployment benefit conditionality and immigration. Immigration might increase this through an anti-solidarity effect because it decreases the perceived deservingness of the unemployed and via a fiscal exposure effect where governments attempt to limit the negative financial consequences of immigration. This article examines this relationship by analysing data for 20 OECD countries from 1985–2012. It complements the literature on how immigration challenges welfare states by examining whether immigration affects not only their budgets but also how beneficiaries are treated. The results show that immigration is associated with stricter benefit sanctions. Moreover, unemployment benefits that are greater weaken this conditionality-enhancing effect of immigration. The effects stem largely from how EU countries respond to intra-EU migration, potentially because they are unable to restrict the access to social security of these migrants.