Social Harmony at the Boundaries of the Welfare State: Immigrants and Social Transfers
Gil S. Epstein, Arye L. Hillman
published in: Journal of Public Economics, 2003, 87 (7-8), 1641-1655
The social contract of the welfare state can be strained by the arrival of immigrants who receive welfare payments financed by citizensí taxes. We show, however, that the presence of unemployed immigrants receiving welfare payments is consistent with social harmony. The social harmony, which is a consequence of a view of unemployment as a labor-market discipline, contrasts with the social conflict predicted by Karl Marx when he proposed his earlier version of the same explanation for unemployment. We demonstrate that a socially harmonious policy is always feasible. Outcomes without social harmony can therefore always be suitably amended.
Text: See Discussion Paper No. 168