Contraction of welfare state

See also welfare state/fiscal burden objection and political externalities.

Some people who oppose open borders and support the welfare state and its underlying ideal of solidarity are worried that under open borders, natives will vote to sharply cut the welfare state because the beneficiaries of the welfare state will be people they don’t feel much solidarity for.

Note that this is both opposite and similar to the welfare objection, which worries about the fact that immigrants will be a drain on the public coffers.

There are, broadly, two kinds of responses. The first response, seen mostly from hard-line libertarians, is to celebrate the happy coincidence that freer immigration leads to a decline in the welfare state. A more moderate response (by those who are somewhat supportive of welfare state principles) is that a contraction of the welfare state, while unfortunate, is a small price to pay for freer immigration.

Below are some blog posts and articles on the subject.

• Immigration and the Welfare State by Bryan Caplan. He writes about the contraction of the welfare state due to immigration:
  

  If you’re a pro-immigration leftist, these findings will probably fill you with dismay: It sure sounds like low-skill immigration undermines middle-class support for the welfare state. Yet if, like me, you love immigration and loathe the welfare state, it’s good news. You might recoil, “It’s ‘good news’ that freedom depends on bigotry?!” But there’s a big difference between “less solidarity” and “bigotry.” And solidarity is a very mixed bag. Despite its surface appeal, solidarity is the #1 cause of self-righteous injustice against out-groups and naysayers. It would be a better world if we could just admit that our “fellow citizens” are not our brothers and sisters, but strangers.

• Liberals Need to Choose: Welfare State or Immigration, an op-ed for the Huffington Post by Alex Nowrasteh. He argues that supporters of the welfare state should consider trading off welfare for immigrants against allowing more immigrants in. In other words, his keyhole solution is to strengthen the wall around the welfare state to prevent immigrants from accessing it:
  

  That also presents a simple solution to the immigration impasse: Build a wall around the welfare state. Short of the preferable goal of eliminating the American welfare state, further restricting its use by immigrants, making them wait longer before they can access it, or making sure that immigrants pay a certain amount in taxes before using it, would go a long way toward convincing Americans that immigration benefits them, as well as the newcomers.

  Liberals who actually care about immigration should sacrifice the welfare state, or at least immigrant access to it, as the price for allowing more immigration. That will go a long way toward convincing American voters to allow more legal immigration.

  Politically, our welfare state is incompatible with increased legal immigration. The welfare state is supposed to decrease poverty, but all too often fails to do so. The average immigrant can expect a five-fold increase in his or her wages just by moving here. If liberals are concerned about poverty, and not just the relative “poverty” that exists in America, they should realize that free emigration is the best anti-poverty tool for the world’s poor.

• Immigration and the Welfare State by Ilya Somin, June 12, 2011, for the Volokh Conspiracy blog. Somin makes points fairly similar to those made by Caplan and Nowrasteh. Somin:
  

  I cite some of the relevant studies in a recent article in the International Affairs Forum on Immigration (pg. 43). The research shows that this effect holds true even in a strongly left-wing country like Sweden. This book by political scientists Donald Kinder and Cindy Kam presents the evidence for the United States (and to a lesser extent, several European countries). Historically, the greater ethnic diversity of the US is one of the main reasons why we have a smaller welfare state than most European nations; the evidence on that point is summarized in a well-known study by Edward Glaeser and Alberto Alesina. Because people are most likely to support welfare programs when the money goes to recipients who are “like us,” immigration actually undermines the welfare state rather than reinforces it. Even if the new immigrants themselves vote for expanded welfare state benefits (which is far from always a given), their political impact is likely to be offset by that of native-born citizens who are generally wealthier, more numerous, and more likely to vote and otherwise participate in politics.

  This feedback effect creates a difficult dilemma for liberals and leftists who support immigration but also want to expand the welfare state. Paul Krugman calls the welfare-immigration tradeoff an “agonizing issue” for liberal Democrats. But for libertarians and other supporters of economic liberty, immigration is a win-win game. It is both an important exercise of economic freedom in its own right, and has the secondary effect of constraining the welfare state.

  It may be lamentable that immigration fails to expand the welfare state primarily because of ethnic bias. I would rather that voters had more admirable motives. But in politics, we often face tradeoffs where it’s better to do the right thing for the wrong reason than not do it at all. Moreover, it is no more bigoted to oppose welfare state benefits because they go to members of other ethnic groups than to support them because they go to members of your group. For example, Kinder and Kam find that strongly “ethnocentric” white voters are more likely to support Social Security benefits than other whites, because they see it as a program that primarily benefits non-Hispanic whites like themselves. In relatively homogeneous states, voters tend to support higher levels of welfare benefits than they would otherwise because they see them as supporting members of their own ethnic or racial group. In more diverse societies, the public supports relatively lower benefits because of a perception that too much of the money goes to racial or ethnic “others.” The former attitude is no less biased than the latter.

  Finally, it’s worth noting, as Bryan Caplan emphasizes, that we need not choose between limiting immigration and cutting welfare benefits across the board. We can, instead, selectively deny such benefits to new immigrants and/or require them to pay special taxes to offset any fiscal burden they might impose on natives. Conservative critics of immigration who recognize these alternatives fear that they won’t be politically viable. But the feedback effect discussed above implies that their political prospects are quite good. Most voters are quite happy to support cutting welfare benefits for recent immigrants or making the latter “pay for themselves.” That’s why the extensive restrictions on immigrant welfare embedded in the 1996 welfare reform act were very popular, as are similar measures proposed in various European countries.

• Libertarians and the Welfare State: Is It Time to Drop the Hard Line? by Bryan Caplan, where he counters bleeding-heart libertarians by arguing that support for the welfare state is an obstacle to freer immigration, and libertarians concerned about the poor should therefore oppose the welfare state.
• Welfare and Immigration: The Flip Side of the Argument by David Friedman.
• Immigrant benefit claims are an argument against the welfare state, not an argument against immigration on the Adam Smith Institute blog.
• Dan Klein to Paul Krugman: You Can Do Better, a blog post by Bryan Caplan noting the contradiction between Krugman’s pro-poor image and his concern that immigration would undermine the welfare state.

Note: Certain empirical objections have been raised to the empirical “contraction of welfare state” argument. These can be found at the bottom of the political externalities page.