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Peer Effects in Welfare Dependence: Quasi-Experimental Evidence

  • Olof Åslund
  • Peter Fredriksson

This paper examines peer effects in welfare use among refugees. We exploit a Swedish refugee placement policy, which generated exogenous variation in peer group composition. Our analysis distinguishes 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. Long-term welfare dependence increases if the individual is placed in a welfare dependent community. The number of contacts is either irrelevant or negatively related to welfare receipt; not controlling for residential self-selection yields the opposite conclusion. The results are very similar across household types and in different parts of the predicted earnings distribution.

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File URL: http://jhr.uwpress.org/cgi/reprint/44/3/798
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Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 44 (2009)
Issue (Month): 3 ()
Pages:

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Handle: RePEc:uwp:jhriss:v:44:y:2009:i3:p798-825
Contact details of provider: Web page: http://jhr.uwpress.org/

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  1. Aizer, Anna & Currie, Janet, 2004. "Networks or neighborhoods? Correlations in the use of publicly-funded maternity care in California," Journal of Public Economics, Elsevier, vol. 88(12), pages 2573-2585, December.
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