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Reducing income transfers to refugee immigrants: Does start-help help you start?

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  • Rosholm, Michael
  • Vejlin, Rune

Abstract

We estimate the effect of lowering income transfers to refugee immigrants in Denmark - labeled start-help - using a competing risk framework. Refugee immigrants obtaining residence permit before July 2002 received larger income transfers than those who obtained their residence permit later. Exploiting this 'quasi-natural' experiment, we find that the lower income transfer has a positive effect on the job-finding rate after two years in Denmark. We also find that the exit rate from the labour force is positively affected by start-help during the early phases of the integration process. Finally, we find that those with the poorest labour market prospects are the least responsive to the improvement in economic incentives.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 17 (2010)
Issue (Month): 1 (January)
Pages: 258-275

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Handle: RePEc:eee:labeco:v:17:y:2010:i:1:p:258-275

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Immigrants Benefit reduction Unemployment duration;

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References

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  1. Edin, P.-A. & Fredriksson, P. & Aslund, O., 2000. "Settlement Policies and the Economic Success of Immigrants," Papers 2000-22, Uppsala - Working Paper Series.
  2. Rosholm, Michael & Vejlin, Rune M., 2007. "Reducing Income Transfers to Refugee Immigrants: Does Starthelp Help You Start?," IZA Discussion Papers 2720, Institute for the Study of Labor (IZA).
  3. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  4. Holmlund, Bertil, 1997. "Unemployment Insurance in Theory and Practice," Working Paper Series 1997:25, Uppsala University, Department of Economics.
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  7. Pedersen, Peder J. & Smith, Nina, 2002. "Unemployment Traps: Do Financial Dis-incentives matter?," CLS Working Papers 01-1, University of Aarhus, Aarhus School of Business, Centre for Labour Market and Social Research.
  8. Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005. "The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment," Economic Journal, Royal Economic Society, vol. 115(505), pages 602-630, 07.
  9. Bover, O. & Arellano, M. & Bentolila, S., 1997. "Unemployment Duration, Benefit Duration, and the Business Cycle," Papers 9717, Centro de Estudios Monetarios Y Financieros-.
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  11. van Ours, Jan C. & Vodopivec, Milan, 2004. "How Changes in Benefits Entitlement Affect Job-Finding: Lessons from the Slovenian "Experiment"," IZA Discussion Papers 1181, Institute for the Study of Labor (IZA).
  12. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  13. Bennmarker, Helge & Carling, Kenneth & Holmlund, Bertil, 2005. "Do benefit hikes damage job finding? Evidence from Swedish unemployment insurance reforms," Working Paper Series 2005:22, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  14. van Ours, Jan C. & Vodopivec, Milan, 2006. "Shortening the Potential Duration of Unemployment Benefits Does Not Affect the Quality of Post-Unemployment Jobs: Evidence from a Natural Experiment," IZA Discussion Papers 2171, Institute for the Study of Labor (IZA).
  15. Clausen, Jens & Heinesen, Eskil & Hummelgaard, Hans & Husted, Leif & Rosholm, Michael, 2008. "The Effect of Integration Policies on the Time until Regular Employment of Newly Arrived Immigrants: Evidence from Denmark," IZA Discussion Papers 3849, Institute for the Study of Labor (IZA).
  16. Rosholm, Michael & Toomet, Ott, 2005. "A Search Model of Discouragement," IZA Discussion Papers 1633, Institute for the Study of Labor (IZA).
  17. Jaap H. Abbring & Gerard J. van den Berg, 2003. "The Nonparametric Identification of Treatment Effects in Duration Models," Econometrica, Econometric Society, vol. 71(5), pages 1491-1517, 09.
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Citations

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Cited by:
  1. Rosholm, Michael & Vejlin, Rune, 2010. "Reducing income transfers to refugee immigrants: Does start-help help you start?," Labour Economics, Elsevier, vol. 17(1), pages 258-275, January.
  2. Pedersen, Peder J., 2011. "Immigration and Welfare State Cash Benefits: The Danish Case," IZA Discussion Papers 6220, Institute for the Study of Labor (IZA).
  3. Aldashev, Alisher & Thomsen, Stephan L. & Walter, Thomas, 2010. "Short-term training programs for immigrants: do effects differ from natives and why?," ZEW Discussion Papers 10-021, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Matti Sarvimäki & Kari Hämäläinen, 2011. "Assimilating Immigrants: The Impact of an Integration Program," Norface Discussion Paper Series 2011015, Norface Research Programme on Migration, Department of Economics, University College London.

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