Outcomes of Swedish migration and economics of the welfare system

Abstract

This article examines the economic consequences of migration for the Swedish welfare system. The question of whether the high costs of receiving refugees undermine the sustainability of the universal welfare state has received considerable attention in the political debate. While most studies focus on the fiscal burden of refugee reception and the short-term impacts of migration on welfare arrangements, this article advocates a comprehensive, long-term assessment of the effects of migration flows on public finances. Starting from the priorities of the architects of the welfare system, who designed and expanded social policy, indicators are derived to assess strategic goals and considerations. Reproduction of the workforce by managing its age profile, increasing employment levels and the employability of the surplus workforce, and creating conditions that increase long-term growth in the economy are considered crucial for the sustainability of the system. From a purely utilitarian perspective, migration is considered beneficial to the economy, provided that migrants gain quick entry to, and a high employment rate in, the labour market.