Norway as a country has been relatively lax about immigrant migration for the last 30 years, mainly because of having a shrinking population. The migrants have come on terms of seeking asylum, family reunification, and for employment. Those coming for employment possibility are interesting to study in the terms of labor economics. This population provides a good sample of what would happen if borders were opened. Bratsberg discusses this in his essay about the immigrant labor market in Norway, which is considered the welfare state. The findings point to a unsettling trend.
If immigrants are required to be employed upon arrival, then employment is quite high, logically, within the host country, superseding the native population employment rate. In his research, Brandsburg reviewed employment data for immigrants arriving in 1975/1976 and following them until the year 2000. He specifically focused on male employment rates, and different trends quickly became clear. Male employment was very high for the first 10 years, with 96% of migrants employed versus 86% of natives, but after that it dropped about 50%, much lower than the native population, matched for age and education. The family dynamic of the males providing for the family and the females being housewives and many children does not support continued employment. Most of these families, 90 percent, received some sort of social welfare, and so were able to continue to support itself. 74% of the non-employed labor migrants and 28% of their non-employed spouses received a permanent disability pension. The Norwegian welfare system has a high replacement ratio for household heads with low labor earnings, a nonworking spouse, and many children, finds Bratsberg, and provides a low incentive to work.
These findings do not bode well for prospective labor migrants. As this is the most comprehensive study on the economic development of migrant labor, it could easily be used as an example of what the market would face were some of the major countries facing population shrinkage to open their borders. Germany, for example, has a similar welfare system, and has been considering opening their borders for many years to provide a labor force for many of the not-so-favorable positions that citizens tend to avoid. However, given the current findings, it seems that, although in the short-term labor migrants contribute to the overall welfare of the system, a good percentage of these turn to leeching off the welfare system after a set period of time, about 10 years after migration. It might be concluded that these migrants then do more harm than good, as they spend the rest of their lives receiving benefits without continuing to contribute to the system, causing the governments of these countries to be saddled with the cost.
from: When Minority Labor Migrants Meet the Welfare State
By Bernt Bratsberg, Oddbjørn Raaum, Knut Røed
Journal of Labor Economics, Vol. 28, No. 3 (July 2010), pp. 633-676