Older immigrants – new poverty risk in Scandinavian welfare states?

ABSTRACT

Many European high-income countries face a rapid increase in the number of immigrants from low- and middle-income countries reaching the normal pension age. Thus, it is increasingly relevant to ask: how are older migrants from such countries faring? Here we study poverty rates and determinants of poverty among natives and persons born in Bosnia, Iran, Iraq, Yugoslavia and Turkey living in Denmark or Sweden in 2010. Income data on all such persons aged 65–82 living in the two destination countries are analysed.

In both Denmark and Sweden, we report much higher poverty rates among the immigrants studied than among natives. Estimated probability models show that being poor is related to a person’s education, family status and age, as well as year of arrival in the destination country and the labour market and his or her residential status at the age of 55. However, the labour market in the destination country at the time of arrival also matter. Persons born in Yugoslavia or Turkey who had immigrated to Denmark during the ‘70s and ‘80s were more likely to be in poverty in 2010 that their counterparts with the same characteristics who had immigrated to Sweden.

KEYWORDS:

• Denmark
• Sweden
• poverty
• older immigrants

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Bosnia and Herzegovina, previously a part of the Socialist Republic of Yugoslavia, was founded in 1992. When registering a person’s country of birth, the statistical authorities in Denmark and Sweden recorded information provided by the immigrant at the time of immigration. Thus, people born in the territory of Bosnia and Herzegovina who arrived before 1992 were recorded as originating from Yugoslavia. Most people recorded as being born in Yugoslavia in our data arrived before 1992. However, a relatively small number who came from the reduced federation of Serbia and Montenegro (known as the Federal Republic of Yugoslavia) who arrived during the period 1992–2003 were probably also recorded as being born in Yugoslavia.

2 In Sweden, Turkey, especially, is a mixed case as quite a large number arrived from Turkey due to antagonism against their Christian faith or as political refugees with a Kurdish background.

3 This applies to persons born in 1939 and later. For persons born before 1939, less demanding requirements apply. For details see Swedish Government (2000/01:136).

4 Minutes from the Swedish Parliament June 4, 2007. Available at: https://www.riksdagen.se/sv/dokument-lagar/dokument/interpellation/flyktingars-ratt-till-garantipension_GU10532

5 The number of newly granted disability pensions in Sweden fell continuously from 73 161 in 2004–14 121 in 2010, see Försäkringskassan (2020).

6 Old people with low pension incomes residing in Denmark or Sweden can apply for support from one or several means-tested public systems. For example, in Sweden there are three different programmes: housing allowances (Bostadsbidrag), social assistance (Ekonomiskt bistånd) and income support for older persons (Äldreförsörjningsstöd). The National Board of Health and Welfare (2011) statistics indicate that no more than three per cent of foreign-born persons received social assistance in 2014, with the corresponding proportion among Swedish-born persons being under half a per cent. However, available evidence indicates substantial non-use among older persons when it comes to housing allowances and social assistance for older persons (Riksrevisionsverket 2013), and the same applies to social assistance (Gustafsson 2002).

7 A detailed overview of legal changes in Denmark since 1992 is found in Hvidtfeldt and Schultz-Nielsen (2017).

8 A number of immigrants have returned to their country of origin or moved on to a third country. This is analysed for Denmark by Jensen and Pedersen (2017) and for Sweden by Klinthäll (2006 and 2007), Nekby (2006) and Monti (2020).

9 In Sweden, we used the equivalence scale: 1.0 for the first adult, 0.51 for the second adult, 0.6 for the third adult, 0.52 for the first child 0–19 years old and 0.42 for child 2, 3, … . 0–19 years old. For Denmark, we use the modified OECD scale with 1.0 for the first adult, 0.5 for each subsequent adult and 0.3 for each child. This cross-country difference is due to differences in the data to which we had access.

10 In the research process we estimated probit regressions as well as logit regressions and found no substantial differences in results between the two alternatives.

11 Although our data are rich in terms of the number of observations, and also making it possible to follow people over time, it has limitations when it comes to some of the factors that have been shown in the literature to relate to immigrants’ degree of integration in the host countries. Examples of such circumstances are foreign education and language proficiency.

12 Selective mortality can also play a role in opposition to the observed pattern. It is to be expected that older people with a high income live longer than those with lower incomes.

13 The explanation of the lower probabilities of being poor in Denmark than in Sweden among migrants from Bosnia is probably a combination of more favourable pension rules, not only for refugees but also for family members arriving as tied movers, and a higher basic social security pension in Denmark. In Ankestyrelsen (2014), it is concluded that nearly all family members of Bosnian refugees were treated in accordance with the rules for refugees, i.e. they were not under the fraction rules for social security pensions based on years of residence before the eligible age.