An unlevel playing field: Immigrant assimilation and welfare utilization

Abstract

This paper investigates the existence and mechanisms of segmentation in the welfare assimilation process of first-generation immigrants in the Netherlands. Using longitudinal administrative data (2007–2015) from Statistics Netherlands (CBS), we estimate the welfare utilization trajectories of migrants over the working-age life course vis-à-vis two reference groups representing different economic segments from the population, namely: average Dutch natives and Dutch natives with low education level. Empirical evidence shows a predominant trend of mainstream assimilation; however, two findings with more concerning implications should be highlighted. Welfare assimilation into the economically disadvantaged segment is found to concentrate among first-generation immigrants characterized by structural and human capital disadvantages, despite the notable extent of upward intragenerational mobility observed. In the worst-case scenario, there seems to be a lack of welfare assimilation to the comparison segments, raising concerns over the prospective emergence of marginalized ethnic groups at the bottom of the economic ladder. The implications of this finding are twofold. Firstly, automatic closing of the migrant-native gap over time should not be presumed in the absence of a level playing field for all regardless of their migration backgrounds. Secondly, systematic discrepancies observed between refugees and other types of migrants in terms of welfare assimilation patterns and determinants point to the need to have a clear distinction between immigration policy and refugee policy, which explicitly avoids bundling all migrants as one homogenous group.