Poverty risk among older immigrants in a scandinavian welfare state

AuthorPeder J. Pedersen,Vibeke Jakobsen
Published date01 September 2017
Date01 September 2017
DOIhttp://doi.org/10.1177/1388262717725937
Subject MatterArticles
Article
Poverty risk among older
immigrants in a scandinavian
welfare state
Vibeke Jakobsen
VIVE – The Danish Centre of Applied Social Science, Denmark
Peder J. Pedersen
VIVE – The Danish Centre of Applied Social Science, Aarhus University and IZA Bonn, Aarhus, Denmark
Abstract
The focus of this paper is on poverty among immigrants and refugees aged 60 years and older
coming to Denmark from countries outside of the OECD, with an emphasis on immigrants who
came as guest workers before 1974, as refugees and as family members and marriage partners (tied
movers) of the individuals coming as guest workers and as refugees. A large proportion of people
in this group were fairly young at the time of their arrival in Denmark. Guest workers who came
before 1974 and refugees and tied movers who arrived in the 1970s and 1980s are now either
close to or above the age of 60, with conditional eligibility to a labour market-related early
retirement programme or to the State pension. Poverty rates by national background are
described using alternative household concepts. A number of background factors with relevance
for poverty are summarised. We focus on age, gender, marital status, occupational status at age 55,
and duration of residence, and find major differences between migrant groups and between
immigrants and natives regarding how income is dependent at different ages on market income,
pensions and benefits. We also present a number of regressions aiming at explaining differences in
the risk of poverty risk in terms of these background factors.
Keywords
Immigrants; pension entitlement; old-age poverty; family structure
Corresponding author:
Peder J. Pedersen, VIVE – The Danish Centre of Applied Social Science, Aarhus University and IZA Bonn, Fuglesangs Alle
´4,
8210 Aarhus V, Aarhus, 8210, Denmark.
E-mail: ppedersen@econ.au.dk
European Journal of Social Security
2017, Vol. 19(3) 242–262
ªThe Author(s) 2017
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DOI: 10.1177/1388262717725937
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Introduction and motivation
In the Nordic countries, ambitious welfare programmes go back several decades. One remarkable
consequence has been that old age is no longer associated with a high risk of poverty. This is a
result of creating a first pillar of the pension system with nearly universal eligibility which
effectively keeps people aged 65 years and older above the poverty line. The main question raised
in the present study is whether people arriving in recent decades as immigrants from low-income
countries are at risk of poverty as they become older - more precisely, when they reach 60-74 years
of age. We analysed this question in two stages. First, we undertook a descriptive approach by
looking at the actual poverty rates among specific immigrant groups. Then, we analysed how the
poverty risk among older immigrants correlated with a number of background factors. A further
approach relative to our main question involved comparing poverty rates using the conventional
family or household definition and poverty rates using an extended family concept defined as the
number of people sharing the same dwelling.
Immigrants are a heterogeneous group that includes labour migrants, refugees and tied movers
from many different countries. Immigrants from low-income countries with different backgrounds
have arrived to Denmark in different waves. One group arrived before the guest worker recruitment
stopped in 1973. They were followed by waves of other family members in subsequent years.
Other major groups of arrivals were people coming as refugees, with countries and regions of
origin shifting with the outbreak of conflicts in different places. The number of refugees arriving to
Denmark increased significantly in the 1980s, but Denmark also received refugees earlier, e.g.
from Vietnam in the 1970s. Here, too, initial groups arriving as refugees were followed by tied
movers as families were reunited.
In the analyses in this study, we include native Danes and immigrants from four countries:
Turkey, Iran, Pakistan, and Vietnam. The countries of origin have been selected partly to ensure a
sufficient number of individuals for the analyses below and partly to represent typical immigrant
groups by time of arrival and background. Immigrants from Turkey and Pakistan were chosen as
representing the typical pre-1973 guest worker countries. Immigrants from Iran and Vietnam were
chosen as representing refugee countries with people arriving at different times. Refugees from
Vietnam had a significantly longer duration of residence than those coming from Iran.
Many immigrants and refugees from low-income countries were quite young when they arrived
in Denmark. Consequently, the age distribution of this group differs significantly from the distri-
bution for the native population. To get an idea of the magnitude of the upcoming challenge in
the area, Table 1 summarises the most recent data of the distribution using five relevant age
intervals for native Danes and for immigrants from Turkey, Iran, Pakistan and Vietnam, and from
all non-Western countries.
1
It is clear from Table 1 that the challenge regarding income in old age
is increasing in this area as the age gradient for this group is much steeper than it is for the native
population. Rather few immigrants are older than 60, but in the coming years and decades the
number of immigrants from low-income countries aged 60 and older will increase steeply in both
absolute and relative terms. The focus below is on income and poverty for immigrants aged 60-74
from Turkey, Iran, Pakistan, and Vietnam in 2011 compared with the native population.
2
1. Table A1 (see Appendix) presents the data by gender for 2011, the most recent year for which we have the full data set
for the analyses below.
2. About 30%of the 60-74-year-old non-Western immigrants are from one of these four countries (see Table 1). We apply
Statistics Denmark’s classification to define non-Western countries (Statistics Denmark 2015). Western countries are
Jakobsen and Pedersen 243

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