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Peer Effects in Welfare Dependence: Quasi-Experimental Evidence

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  • Olof Åslund
  • Peter Fredriksson

Abstract

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.

Suggested Citation

  • Olof Åslund & Peter Fredriksson, 2009. "Peer Effects in Welfare Dependence: Quasi-Experimental Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    • Handle: RePEc:uwp:jhriss:v:44:y:2009:i3:p798-825
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    References listed on IDEAS

    as
    1. Olof Åslund & John Östh & Yves Zenou, 2010. "How important is access to jobs? Old question--improved answer," Journal of Economic Geography, Oxford University Press, vol. 10(3), pages 389-422, May.
    2. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 1019-1055.
    3. 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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