Cato Institute Senior Fellow Dan Mitchell
That’s how Cato Institute senior fellow Dan Mitchell describes the mix of high taxes and high spending on welfare that stunt the assimilation of immigrants to the developed world.
Dan writes:
So what’s the problem? Why are immigrants failing to prosper?
Nima suggests that government policies are the problem, creating perverse incentives for long-term dependency.
To be more specific, thecountry’s extravagant welfare state acts as flypaper, preventing people from climbing in the ladder of opportunity.
The combination of generous benefits, high taxes and rigid labour regulations reduce the incentives and possibilities to find work. Entrapment in welfare dependency is therefore extensive, in particular amongst immigrants. Studies have previously shown that even highly educated groups of foreign descent struggle to become self-dependent in countries such as Norway and Sweden. …The high-spending model is simply not fit to cope with the challenges of integration.
The part about “highly educated groups” is particularly important since it shows that the welfare trap doesn’t just affect low-skilled immigrants (particularly when high tax rates make productive activity relatively unattractive).
So what’s the moral of the story? Well, the one obvious lesson is that a welfare state is harmful to human progress. It hurts taxpayers, of course, but it also has a harmful impact on recipients.
