The Welfare State
How does the welfare state in each country affect the economic situation for immigrants? One might expect that cross-national differences in social welfare institutions would magnify economic differences due to labor market outcomes, since they reflect many of the same values and priorities. The U.S. welfare state is weaker and less interventionist than its counterparts in Canada and Australia. The U.S. approach to social welfare reflects the same individualistic orientation which pervades its labor markets and other institutions. Help for the poor, in the form of income redistribution through progressive taxation and targeted social assistance, is relatively minimal. By contrast, while Canadian and Australian social safety nets may not be as generous as the European standard, they are more effective antipoverty programs. So immigrants as potentially disadvantaged persons might be expected to benefit more in Canada and Australia than in the United States.
However, things don't quite work out that way, because other factors come into play. A comparison of studies of welfare use by immigrants in each country, reviewed below, shows greater welfare use by immigrants in the United States, and less in Canada and Australia. This difference apparently applies not only to the poorest U.S. immigrants from Mexico but also to immigrants of other non-European origins. Immigrants in all groups use welfare more frequently in the United States. The reason, evidently, relates to their lower earnings levels. Lower average immigrant earnings in each immigrant group in the United States mean that larger proportions of these immigrants run into economic difficulties. Compared to their counterparts in Canada or Australia, immigrants in the United States more often experience serious problems of economic adjustment, and they more often fall into poverty. Hence, immigrants in the United States more often are forced to rely on welfare assistance, less generous though that assistance may be.
This chapter reviews evidence about two aspects of the immigrants/ welfare issue. The first relates to the description of cross-national differ-