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The dynamics of welfare entry and exit amongst natives and immigrants

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  • Christoph Wunder
  • Regina T. Riphahn

Abstract

This article studies welfare entry and exit in Germany and determines the relevance of state dependence for natives and immigrants. Based on dynamic multinomial logit estimations, we calculate transition matrices between three labour market states. We find that temporal persistence in welfare participation can mostly be explained by observed and unobserved characteristics. Immigrants appear to have a higher risk of welfare entry and a lower probability of welfare exit compared to natives. The results do not yield strong evidence of state dependence or of an overall welfare trap.

Suggested Citation

  • Christoph Wunder & Regina T. Riphahn, 2014. "The dynamics of welfare entry and exit amongst natives and immigrants," Oxford Economic Papers, Oxford University Press, vol. 66(2), pages 580-604.
    • Handle: RePEc:oup:oxecpp:v:66:y:2014:i:2:p:580-604.
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    File URL: http://hdl.handle.net/10.1093/oep/gpt025
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    Cited by:

    1. Kerstin Bruckmeier & Katrin Hohmeyer & Stefan Schwarz, 2018. "Welfare receipt misreporting in survey data and its consequences for state dependence estimates: new insights from linked administrative and survey data," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-21, December.
    2. Kabir Dasgupta & Alexander Plum, 2023. "Human capital formation and changes in low pay persistence," Applied Economics, Taylor & Francis Journals, vol. 55(56), pages 6583-6604, December.
    3. Lucchetti, Riccardo & Pigini, Claudia, 2017. "DPB: Dynamic Panel Binary Data Models in gretl," Journal of Statistical Software, Foundation for Open Access Statistics, vol. 79(i08).
    4. Coban, Mustafa, 2017. "Wage mobility, wage inequality, and tasks: Empirical evidence from Germany, 1984-2014," Discussion Paper Series 139, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    5. 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.
    6. Mosthaf, Alexander & Schank, Thorsten & Schwarz, Stefan, 2021. "Do Supplementary Jobs for Welfare Recipients Increase the Chance of Welfare Exit? Evidence from Germany," IZA Discussion Papers 14268, Institute of Labor Economics (IZA).
    7. Bruckmeier, Kerstin & Hohmeyer, Katrin & Schwarz, Stefan, 2018. "Welfare receipt misreporting in survey data and its consequences for state dependence estimates: new insights from linked administrative and survey data," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages 1-16.
    8. Regina T. Riphahn & Christoph Wunder, 2016. "State dependence in welfare receipt: transitions before and after a reform," Empirical Economics, Springer, vol. 50(4), pages 1303-1329, June.
    9. Kerschbaumer Lukas, 2019. "Handlungsfähigkeit bei Langzeitarbeitslosigkeit: Woher nehmen?," Arbeit, De Gruyter, vol. 28(1), pages 73-94, March.
    10. Sarah Carpentier & Karel Neels & Karel Van den Bosch, 2017. "Do First- and Second-Generation Migrants Stay Longer in Social Assistance Than Natives in Belgium?," Journal of International Migration and Integration, Springer, vol. 18(4), pages 1167-1190, November.
    11. Azarnert, Leonid V., 2018. "Refugee resettlement, redistribution and growth," European Journal of Political Economy, Elsevier, vol. 54(C), pages 89-98.
    12. Bruckmeier, Kerstin & Hohmeyer, Katrin & Schwarz, Stefan, 2018. "Welfare receipt misreporting in survey data and its consequences for state dependence estimates: new insights from linked administrative and survey data," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages .16(1-21).
    13. Martin Biewen, 2014. "Poverty persistence and poverty dynamics," IZA World of Labor, Institute of Labor Economics (IZA), pages 103-103, November.
    14. Francesco Bartolucci & Claudia Pigini, 2017. "Granger causality in dynamic binary short panel data models," Working Papers 421, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    15. Bruckmeier, Kerstin & Wiemers, Jürgen, 2016. "Differences in welfare take-up between immigrants and natives : a microsimulation study," IAB-Discussion Paper 201608, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    16. repec:iab:iabjlr:v:52:i:1:p:art.16 is not listed on IDEAS
    17. Wunder, Christoph & Riphahn, Regina, 2013. "Welfare transitions before and after reforms of the German welfare system," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79715, Verein für Socialpolitik / German Economic Association.
    18. Bruckmeier, Kerstin & Wiemers, Jürgen, 2016. "Differences in welfare take-up between immigrants and natives," VfS Annual Conference 2016 (Augsburg): Demographic Change 145828, Verein für Socialpolitik / German Economic Association.
    19. Alexander Mosthaf & Thorsten Schank & Stefan Schwarz, 2024. "Do supplementary jobs for welfare recipients increase the chance of welfare exit? Evidence from Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(3), pages 291-324, July.

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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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