Does Welfare Reduce Segregation?


By Terje Wesse (University of Oslo), Roger Andersson (Uppsala University), Timo Kauppinen (National Institute for Health and Welfare, Helsinki), and Hans Skifter Andersen (Aalborg University)

The Nordic welfare model is famous throughout the world for its emphasis on equality, universal rights and social cohesion. A less familiar idea is to promote social diversity, i.e. spatial integration, at the neighborhood level. Measures that attempt to avoid clustering of social groups include public spending, physical planning, allocation of housing, and regeneration programs. These geographical policies are closely associated with the egalitarian ideology, since they emerge from the same cultural context, and since redistributive policies rest on consensus. The founders of the Nordic model may not have known the word “segregation”, but they knew the practical reality of divided cities, and they feared that such cities might impede redistribution through taxes and transfers. Currently, much of the debate concerns levels of ethnic segregation and the extent to which differences in settlement fade over time. Policy-makers and civil society alike are generally responsive to the content of the spatial assimilation model, i.e., the notion that immigrants will convert increasing economic resources into better neighborhoods.

We investigate the latter idea in four metropolitan areas: Copenhagen, Helsinki, Oslo and Stockholm. We follow immigrants in each region over eight years, from 2000 to 2008, in order to trace movements in the hierarchy of low-income, middle-income and high-income neighborhoods. What we search for is a potential association between welfare provision and the pace of spatial integration: our hypothesis is that extensive welfare arrangements, and the cultural framework that sustains these arrangements, may reduce both the need and opportunity for spatial integration. The former effect emerges because poor neighborhoods have been lifted to a higher standard through subsidies and regulations. The second effect appears because natives avoid mixed neighborhoods, because employers discriminate by ethnic origin, or because immigrants face a small difference between benefits and labor market income.

Our results broadly confirm the hypothesis. Many immigrants lack work, and those who increase their earnings are quite few. On average, there is no improvement in neighborhood status in any of the four regions. Immigrants who move to better neighborhoods achieve greater proximity to natives, but since other movements work in the opposite direction, there is no major change in the level of segregation. We further observe that differences in upward spatial mobility between immigrants with different levels of income are smallest in Oslo, further that immigrants with a weak connection to the labor market are worst off in Copenhagen. Variations between the four regions are therefore in line with the expected association between welfare policies and spatial integration. Helsinki show some deviant outcomes, which are explained by later arrival of immigrants and a different housing market structure.

We are not able to trace the importance of social and spatial equality versus other mechanisms. A tentative conclusion, however, is that redistribution and public investments play a role in all four cases. There are also signs of selective native mobility, i.e. avoidance of mixed neighborhoods, as well as labor market discrimination. One city, Oslo, has an intersection of benefits which, for some groups, may undermine the principle that “work should pay”.

These results are fundamentally different from those obtained in American studies. We believe the welfare context explains part of the deviation, and we therefore encourage research on a broader comparative scale. We also propose some policy measures in the Nordic context. Concentration of ethnic minorities in certain areas may not be disastrous, given that schools and public services have a decent standard. A long-term separation of ethnic groups, however, is not desirable for a model that builds on affective attachment between people. The policies we propose fall in two categories. One category includes qualification programs, effective actions against labor market discrimination and other measures that might increase labor market participation among immigrants. The other category includes schemes that support redevelopment and revitalization of low-price housing areas. A reinforcement of place-based policies may improve the opportunities for immigrants, and equally important, increase the proportion of natives in multi-ethnic areas.

Terje Wessel is professor in urban geography at the University of Oslo.

Roger Andersson is professor in social and economic geography at Uppsala University.

Timo Kauppinen is senior researcher at the National Institute for Health and Welfare, Helsinki.

Hans Skifter Andersen is adjunct professor at The Danish Institute for Building Research, Aalborg University.

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