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Never give up? The persistence of welfare participation in Sweden

Author

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  • Andrén, Daniela

    (Department of Business, Economics, Statistics and Informatics)

  • Andrén, Thomas

    (National Institute of Economic Research and IZA)

Abstract

Welfare persistence is estimated and compared between Swedish-born and foreign-born households during the 1990s. This is done within the framework of a dynamic discrete choice model controlling for the initial condition and permanent unobserved heterogeneity. We control for three types of persistence in terms of observed and unobserved heterogeneity, serial correlation, and structural state dependence, the focus being on the latter measure. The results show that state dependence in Swedish welfare participation was strong. This effect was three times as large for the foreign-born compared to Swedish-born, but when this effect is distributed over time, it disappears after three years for both groups. Contrary to previous studies, our results for foreignborn are that both country of origin and time in the country of destination have only small impacts on welfare participation.

Suggested Citation

  • Andrén, Daniela & Andrén, Thomas, 2012. "Never give up? The persistence of welfare participation in Sweden," Working Papers 2012:1, Örebro University, School of Business.
    • Handle: RePEc:hhs:oruesi:2012_001
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    Cited by:

    1. Azarnert, Leonid V., 2018. "Refugee resettlement, redistribution and growth," European Journal of Political Economy, Elsevier, vol. 54(C), pages 89-98.
    2. Herwig Immervoll & Stephen P. Jenkins & Sebastian Königs, 2015. "Are Recipients of Social Assistance 'Benefit Dependent'?: Concepts, Measurement and Results for Selected Countries," OECD Social, Employment and Migration Working Papers 162, OECD Publishing.
    3. Paweł Kaczmarczyk, 2013. "Are immigrants a burden for the state budget? Review paper," RSCAS Working Papers 2013/79, European University Institute.
    4. Manudeep Bhuller & Christian N. Brinch & Sebastian Königs, 2017. "Time Aggregation and State Dependence in Welfare Receipt," Economic Journal, Royal Economic Society, vol. 127(604), pages 1833-1873, September.
    5. Sebastian Königs, 2013. "The Dynamics of Social Assistance Benefit Receipt in Germany: State Dependence Before and After the Hartz Reforms," OECD Social, Employment and Migration Working Papers 136, OECD Publishing.
    6. Kaczmarczyk, Pawel, 2015. "Burden or Relief? Fiscal Impacts of Recent Ukrainian Migration to Poland," IZA Discussion Papers 8779, Institute of Labor Economics (IZA).
    7. Andrén, Daniela & Andrén, Thomas, 2013. "State dependence in Swedish social assistance," Working Papers 2013:7, Örebro University, School of Business.
    8. Björn Gustafsson & Katarina Katz & Torun Osterberg, 2019. "Social Assistance Receipt Among Young Adults Who Grow Up in Different Neighborhoods of Metropolitan Sweden," Poverty & Public Policy, John Wiley & Sons, vol. 11(4), pages 302-324, December.
    9. Sinem H. Ayhan & Selin Pelek, 2020. "State Dependence in Welfare Benefits in a Non‐Welfare Context," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(3), pages 711-735, September.
    10. Sebastian Königs, 2015. "Micro-level dynamics of social assistance receipt. Evidence from 4 European countries," Discussion Papers 797, Statistics Norway, Research Department.

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    More about this item

    Keywords

    social assistance; welfare persistence; state dependence; unobserved heterogeneity; initial condition; dynamic probit model; GHK simulator;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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