Econstudentlog

Data on Danish immigrants, 2011 (4)

Before I started out this post I thought it would be the last one in the series, but at the end of the day I decided to wait with the crime data until later. This part will mostly deal with public expenditures and stuff like that. Here’s a link to the previous post in the series.

*While non-Western immigrants make out 6% of the population at the age of 16-64, they make up 10% of all people in Denmark who derive their main income from government transfers (…’are provided for by the government’ is perhaps a more ‘direct’ translation. The Danish term used in the report is: ‘er på offentlig forsørgelse’). In this framework, the concept of government transfers includes various direct income transfer programs like unemployment benefits (kontanthjælp, dagpenge), and early retirement programmes (efterløn, førtidspension), as well as governmentally subsidized employment programs (ansættelse med løntilskud, fleksjob). People working for the government are not included. (p.87-88) The ‘% of X who are provided for by the government’-measure is not the ratio of people in the sample who have received the various transfers included in the measure over the course of a year, it is rather based on a sum of all the people who have over various points in time during the year been receiving these transfers. If you have a group of one hundred people and twelve of them each received a transfer for one month during that year, that would translate to 1% of that population being provided for by the government; it’s a rough measure of the amount of ‘full-time recipients’ and should be interpreted as such. For people who receive early retirement transfers from the government the overlap between the total number of recipients over the course of a year and the number of ‘full-time recipients’ is naturally much larger than it is when it comes to transfers like unemployment benefits. (pp.87,104)

*In Denmark, two of the main social assistance programs for people who are in the workforce are ‘kontanthjælp’ and ‘dagpenge’. Kontanthjælp is the basic income support system for people without any kind of supplemental job insurance, and you can only receive it when you’ve basically depleted your assets – if you have liquid assets worth more than ~$2.000 (Danish link), you do not have the right to receive this transfer. In this context, a car you might need to drive to work is considered a liquid asset. Dagpenge is a more generous job insurance scheme subsidized by the government; the transfer payments are higher and they are completely independent of personal wealth. Approximately one in 4 (24%) of all people who receive kontanthjælp are non-Western immigrants. (p.87) 7% of all non-Western immigrants at the age of 16-64 receive kontanthjælp, whereas the corresponding number for people of Danish origin is 1,5%. (p.91)

*As the employment rates of non-Western immigrants are lower than the employment rates of people of Danish origin, it makes sense that they are also more likely to be provided for by the government. 38% of non-Western immigrants are provided for by the government, whereas the corresponding numbers for people of Danish origin and Western immigrants are 24% and 16%. (p.87)

*More than half of Lebanese-, Iraqi-, and Somali immigrants are provided for by the government. And more than half of all women from Lebanon, Somalia, Jugoslavia, Iraq and Turkey are provided for by the government. (p.87)

*Middle aged immigrants in particular have much lower employment rates than people of Danish origin at the same age, and they are thus much more likely to be provided for by the government. 60% of male non-Western immigrants at the age of 50-59 and 61% of female non-Western immigrants at the age of 50-59 are provided for by the government. The corresponding numbers for males and females of Danish origin are 23% and 26%. (p.87)

*The country of origin is an important variable when considering the likelihood that an individual immigrant is provided for by the government. 20,7% of all males of Danish origin at the age of 16-64 were provided for by the government in 2010. For Western immigrants combined it was 13,9% of males at the age of 16-64 who were provided for by the government, and for non-Western immigrants combined it was 36,7% of males at the age of 16-64 who were provided for by the government. Some more detailed numbers for male Western and non-Western immigrant populations – first the Western countries: Sweden (19,3%), Germany (18,6%), Great Britain (18,0%), Iceland (16,8%), Italy (15,7%), Norway (14,9%), Poland (12,9%), USA (11,0%), Netherlands (10,1%), France (8,8%), Romania (8,0%), and Lithuania (3,3%). The corresponding numbers for non-Western countries: Lebanon (57,8%), Iraq (51,5%), Somalia (50,1%), Bosnia-Hercegovina (45,6%), Ex Yugoslavia (44,4%), Iran (44,1%), Morocco (41,7%), Sri Lanka (37,3%), Turkey (37,0%), Afghanistan (35,1%), Vietnam (31,4%), Pakistan (29,5%), Russia (20,4%), Thailand (16,5%), Philippines (14,8%), India (9,7%), China (7,8%), and Ukraine (2%). (p.94)

*The female numbers are generally higher. I shall have to make a small digression here before I deal with those numbers: When the Danish Welfare Commission (Velfærdskommissionen) analyzed the distributionary features of the the Danish welfare system considering the gender variable, they found (Danish link) that females were on average net benefactors and males on average net contributors over an entire life span – a newborn male could, given current policies at the time the report was made, expect to pay in 0,8 million kroner ($150k) more than he’d receive over his lifespan, whereas a newborn female at that time could expect to receive 2,4 million kroner ($435k) more from the government than she’d contribute in taxes ect. Danes who are interested can read chapter 3 of this report – unfortunately I do not think an English version of that report exists. It’s likely that the relative contribution rates have changed somewhat by now, but it would surprise me a lot if they are much different now, as most of the reasons for these distributional consequenses of the welfare system have not changed much.

*Either way, as mentioned above when it comes to the females the numbers are generally higher for all groups. Of the females of Danish origin at the age of 16-64, 26,3% of them were supported by the government in 2010. For female immigrants from Western countries, the corresponding number was 18,9% and for non-Western female immigrants the number was 39,1%. Below some country-specific data – first Western countries: Sweden (24,3%), Poland (24,0%), Norway (23,5%), Great Britain (21,0%), Iceland (20,8%), Germany (18,7%), Romania (15,4%), Netherlands (14,2%), USA (12,4%), France (11,6%), Lithuania (11,5%), and Italy (11,3%). Non-Western countries: Lebanon (66,2%), Somalia (55,6%) Ex Yugoslavia (54,9%), Iraq (53,6%), Turkey (51,3%), Bosnia-Herzegovina (49,9%), Morocco (49,4%), Pakistan (45,1%), Iran (42,8%), Afghanistan (41,7%), Sri Lanka (41,6%), Vietnam (39,2%), Thailand (23,0%), Russia (20,9%), India (18,6%), China (13,9%), Ukraine (12,5%), and Philippines (11,7%). (p.95)

*The report doesn’t talk about the data much, but when analyzing the numbers above there are a couple of observations worth making here. The first is that the Swedish numbers are problematic to compare with the rest of the Western countries – it is quite likely that part of the reason why the Swedish numbers are high is that many of the ‘Swedish immigrants’ Denmark receive are in reality immigrants from non-Western countries who have used Sweden as a stepping-stone to enter Denmark, because Swedish immigration laws are much more lax than are the Danish, and it is much easier to enter Denmark via Sweden than, say, via Somalia. One other thing to note here is that the non-Western countries with high dependency rates are almost exclusively countries with large muslim populations. The non-Western immigrants from Thailand, China, Russia, India, and Ukraine in fact all ‘do better’, some of them much better, than people of Danish origin – and most of these populations are perfectly comparable to the immigrant populations from Western countries.

*Calculating net contribution rates is beyond the scope of a report like this, but I thought it would be worth including a few numbers from the publications of the Danish Welfare Commission (Velfærdskommissionen, also mentioned above). The short version is this (pp.121-122):

The graphs display the calculated net contribution to the government finances of males (the first one) and females (the second one) depending on age given the policies that were in effect at that point in time. The calculations are based on the Danish DREAM model.
Green = Danish origin.
Dark blue = immigrants from ‘developed countries’ (direct translation: ‘more developed countries’).
Turquoise = descendants of immigrants from -ll-.
Red = immigrants from ‘lesser-developed countries’.
Grey = descendants of -ll-.

They calculate in the report (p.123) that when looking at the financial net contributions to the government over the lifespan of an individual the estimated net present value (…NPV) of a male immigrant from a lesser-developed country is -0,28 mio. kroner ($50k), whereas the NPV of a female immigrant from a lesser-developed country is -4,4 mio. kroner ($800k). The NPV of a new-born male descendant of an immigrant from a lesser developed country is -0,17 mio. kroner ($30.000), and the NPV of a new-born female descendant of an immigrant from a lesser-developed country is -3,13 mio. kroner ($570k). The NPVs of immigrants from more-developed countries are 3,04 mio. kroner/$553k (males) and -0,65 mio. kroner/-$118k (females). The estimates are from 2004 and they are sensitive to changes in policy, but not that sensitive.

*Off topic, but I thought I should mention it anyway: The Florida Birth Defects Registry in 1999 estimated the lifetime costs for a child with Down Syndrome to be nearly $500,000. A Danish estimate would be much higher, but note that this cost estimate is significantly lower than the cost estimate of an average female immigrant from a lesser-developed country. In the 90es it was despite this not uncommon in Denmark to see political arguments to the effect that we needed to import immigrants from the Third World in order to save the Danish welfare state from economic ruin in the long run.

*Anyway, they remark in the Welfare Commission report that:

‘The negative contributions pr. person for immigrants and descendants from lesser-developed countries have a significant effect on the total future public-sector budget-balance problem, because both these groups are growing fast. In 2003 these two groups made up 4,7 % of the population, whereas they in 2040 are expected to make up 11,8% of the population, if the present (low) level of immigration is unchanged.’

(“De negative bidrag pr. person for indvandrere og efterkommere fra mindre udviklede lande har en betydelig effekt på det samlede fremtidige finansieringsproblem for den offentlige sektor, fordi begge disse grupper vokser med betydelig hast. I 2003 udgjorde de to grupper tilsammen 4,7 pct. af befolkningen, mens de i 2040 forventes at udgøre 11,8 pct. af befolkningen, hvis den nuværende (lave) indvandring fastholdes.” – p.125)

*As mentioned before, the overlap between the number of people who are in fact full-time recipients of a given public transfer payment and the number of people who have received a certain type of transfer payment only during a short time period over the course of the year depends on the nature of the transfer. A way to measure the average duration people receive a certain type of transfer is to divide the number of calculated full-time recipients with the number of people who have at some point during the year received the transfer. Immigrants from non-Western countries who receive temporary transfers on average receive those transfers for a longer period of time than do people of Danish origin or immigrants from Western countries and this is particularly the case when it comes to kontanthjælp: Non-Western immigrants who receive kontanthjælp on average receive it for 52% of the year, whereas the corresponding number for people of Danish origin is 40% – which is again significantly higher than the number for Western immigrants, which is 31-32% (judging from the graph on page 104; no numbers are given in the text).

January 31, 2012 - Posted by | data, demographics, economics, immigration

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