The Korean Economic Review
Migrants, Ethnicity and the Welfare State
Gil S. Epstein (Bar-Ilan University)Year 2012Vol. 28No. 2
A model is set up where migrants must choose a level of social traits and consumption ofethnic goods. As the consumption level of ethnic goods increases, the migrants become evermore different to the local population and are less assimilated. Less assimilation affects thereaction of the local population to the migrants and their willingness to accept thenewcomers. This social phenomenon and affects wages and unemployment. We show thatthe growth in the unemployment and social benefits of legal migrants increases theconsumption of ethnic goods, thus creating a trap wherein the willingness of the localpopulation to accept the migrants into the economy decreases. This process also increases theprobability of the migrants’ dependence on the welfare state. On the other hand, illegalmigrants could play an important role in the assimilation of the legal migrants.