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Ethnic Enclaves and Welfare Cultures: Quasi-Experimental Evidence

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  • Aslund, Olof

    ()
    (IFAU)

  • Fredriksson, Peter

    ()
    (Stockholm University)

Abstract

We examine peer effects in welfare use among immigrants to Sweden by exploiting a governmental refugee placement policy. We distinguish between the quantity of contacts – the number of individuals of the same ethnicity – and the quality of contacts – welfare use among members of the ethnic group. OLS regressions suggest that both these factors are positively related to individual welfare use. Instrumental variables estimations yield the conclusion that only the quality of contacts matter. An increase of the fraction of the ethnic group on welfare by 10 percent raises the individual probability of welfare use by almost 7 percent.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1536.

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Length: 39 pages
Date of creation: Mar 2005
Date of revision:
Publication status: published as: 'Peer Effects in Welfare Dependence: Quasi-experimental Evidence" in: Journal of Human Resources, 2009, 44(3), 799–825
Handle: RePEc:iza:izadps:dp1536

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Keywords: welfare cultures; welfare use; ethnic concentration; immigrants;

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References

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  1. Edin, Per-Anders & Fredriksson, Peter, 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Working Paper Series 2000:19, Uppsala University, Department of Economics.
  2. Edin, P.-A. & Fredriksson, P. & Aslund, O., 2000. "Settlement Policies and the Economic Success of Immigrants," Papers 2000-22, Uppsala - Working Paper Series.
  3. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2000. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," NBER Working Papers 7973, National Bureau of Economic Research, Inc.
  4. Lindbeck, Assar, 1997. "Incentives and Social Norms in Household Behavior," American Economic Review, American Economic Association, vol. 87(2), pages 370-77, May.
  5. Wooldridge, Jeffrey M., 2003. "Further results on instrumental variables estimation of average treatment effects in the correlated random coefficient model," Economics Letters, Elsevier, vol. 79(2), pages 185-191, May.
  6. Per-Anders Edin & Peter Fredriksson & Olof �slund, 2003. "Ethnic Enclaves And The Economic Success Of Immigrants - Evidence From A Natural Experiment," The Quarterly Journal of Economics, MIT Press, vol. 118(1), pages 329-357, February.
  7. Manski, Charles F, 1993. "Identification of Endogenous Social Effects: The Reflection Problem," Review of Economic Studies, Wiley Blackwell, vol. 60(3), pages 531-42, July.
  8. Edin, P.-A. & Lalonde, R.J. & Aslund, O., 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Papers 2000-13, Uppsala - Working Paper Series.
  9. James Heckman & Edward Vytlacil, 1998. "Instrumental Variables Methods for the Correlated Random Coefficient Model: Estimating the Average Rate of Return to Schooling When the Return is Correlated with Schooling," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 974-987.
  10. Anna Aizer & Janet Currie, 2002. "Networks or Neighborhoods? Correlations in the Use of Publicly-Funded Maternity Care in California," NBER Working Papers 9209, National Bureau of Economic Research, Inc.
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