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Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate Into or Out-of Welfare

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Author Info
Jörgen Hansen () (IZA, Bonn)
Magnus Lofstrom () (IZA, Bonn)

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Abstract

This paper analyzes differences in welfare utilization between immigrants and natives in Sweden using a large panel data set, LINDA, for the years 1990 to 1996. Both welfare expenditures and immigration increased in Sweden in the 1990's. We find that immigrants use welfare to a greater extent than natives and that non-refugee immigrants utilize social assistance less than refugee immigrants. Differences in welfare participation and number of months on welfare between immigrants and natives cannot be explained by observable socioeconomic characteristics. Using a random effects probit model, we find that immigrants lower their participation rates in welfare with time spent in Sweden. Refugees display substantially higher public assistance participation rates upon arrival in Sweden compared to non-refugee immigrants, but they assimilate out-of welfare at a faster rate than non-refugee immigrants. Neither immigrant group is predicted to reach the participation rates of native households within a 20 year period in Sweden. A fixed effects logit model supports these findings. The predicted differences in the length of social assistance spells follow a very similar pattern. Simulations of the move to a national uniform benefits structure in 1998 show a decrease in the participation rate and in expenditures.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 100.

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Length: 55 pages
Date of creation: Dec 1999
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Handle: RePEc:iza:izadps:dp100

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Related research
Keywords: Welfare; immigration; assimilation; panel data;

Other versions of this item:

Find related papers by JEL classification:
H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities and Races; Non-labor Discrimination
J61 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-89, October. [Downloadable!] (restricted)
  2. S. A. Maani, 1993. "Immigrants and the Use of Government Transfer Payments," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 26(4), pages 65-76. [Downloadable!] (restricted)
  3. Francine D. Blau, 1984. "The use of transfer payments by immigrants," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 37(2), pages 222-239, January.
  4. Borjas, George J. & Trejo, Stephen J., 1993. "National origin and immigrant welfare recipiency," Journal of Public Economics, Elsevier, vol. 50(3), pages 325-344, March. [Downloadable!] (restricted)
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  5. George J. Borjas & Stephen J. Trejo, 1991. "Immigrant Participation in the Welfare System," NBER Working Papers 3423, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Zimmermann, Klaus F, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring. [Downloadable!] (restricted)
  7. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December. [Downloadable!] (restricted)
  8. Borjas, George J & Hilton, Lynette, 1996. "Immigration and the Welfare State: Immigrant Participation in Means-Tested Entitlement Programs," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 575-604, May. [Downloadable!] (restricted)
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  9. Julian R. Betts & Magnus Lofstrom, 1998. "The Educational Attainment of Immigrants: Trends and Implications," NBER Working Papers 6757, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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