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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

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    1. Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 2000. "Network Effects and Welfare Cultures," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 1019-1055.
    2. 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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    Cited by:

    1. Francis Kramarz & Oskar Nordström Skans, 2014. "When Strong Ties are Strong: Networks and Youth Labour Market Entry," Review of Economic Studies, Oxford University Press, vol. 81(3), pages 1164-1200.
    2. Assar Lindbeck & Mårten Palme & Mats Persson, 2016. "Sickness Absence and Local Benefit Cultures," Scandinavian Journal of Economics, Wiley Blackwell, vol. 118(1), pages 49-78, January.
    3. Olof Åslund & Per-Anders Edin & Peter Fredriksson & Hans Grönqvist, 2011. "Peers, Neighborhoods, and Immigrant Student Achievement: Evidence from a Placement Policy," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 67-95, April.
    4. Achatz, Juliane & Trappmann, Mark, 2011. "Arbeitsmarktvermittelte Abgänge aus der Grundsicherung : der Einfluss von personen- und haushaltsgebundenen Barrieren," IAB Discussion Paper 201102, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Oleksandr Zhylyevskyy & Helen H. Jensen & Steven B. Garasky & Carolyn E. Cutrona & Frederick X. Gibbons, 2010. "Effects of Family, Friends, and Relative Prices on Fruit and Vegetable Consumption by African American Youths," Center for Agricultural and Rural Development (CARD) Publications 10-wp515, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. Qingyan Shang, 2014. "Endogenous neighborhood effects on welfare participation," Empirical Economics, Springer, vol. 47(2), pages 639-667, September.
    7. 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.
    8. Johanna Catherine Maclean & Douglas Webber & Jody L. Sindelar, 2013. "The Roles of Assimilation and Ethnic Enclave Residence in Immigrant Smoking," NBER Working Papers 19753, National Bureau of Economic Research, Inc.
    9. González-Pampillón, Nicolás & Jofre-Monseny, Jordi & Viladecans-Marsal, Elisabet, 2016. "Can Urban Renewal Policies Reverse Neighborhood Ethnic Dynamics?," CEPR Discussion Papers 11676, C.E.P.R. Discussion Papers.
    10. Stephen L. Ross, 2009. "Social Interactions within Cities: Neighborhood Environments and Peer Relationships," Working papers 2009-31, University of Connecticut, Department of Economics.
    11. Dujardin, Claire & Goffette-Nagot, Florence, 2010. "Neighborhood effects on unemployment?: A test à la Altonji," Regional Science and Urban Economics, Elsevier, vol. 40(6), pages 380-396, November.
    12. Johanna Catherine Maclean & Douglas Webber & Jody L. Sindelar, 2018. "Immigration and Access to Fringe Benefits: Evidence from the Tobacco Use Supplements," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 57(2), pages 235-259, April.
    13. Simen Markussen & Knut Røed, 2015. "Social Insurance Networks," Journal of Human Resources, University of Wisconsin Press, vol. 50(4), pages 1081-1113.
    14. Nekby, Lena, 2010. "Inter- and Intra-Marriage Premiums Revisited: It’s probably who you are, not who you marry!," SULCIS Working Papers 2010:12, Stockholm University, Linnaeus Center for Integration Studies - SULCIS.
    15. Rieck, Karsten Marshall Elseth & Vaage, Kjell, 2012. "Social Interactions At The Workplace: Exploring Sickness Absence Behavior," Working Papers in Economics 11/12, University of Bergen, Department of Economics.
    16. Olof Åslund & Per-Anders Edin & Peter Fredriksson & Hans Grönqvist, 2011. "Peers, Neighborhoods, and Immigrant Student Achievement: Evidence from a Placement Policy," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 67-95, April.
    17. Chakraborty, Tanika & Nottmeyer, Olga & Schüller, Simone & Zimmermann, Klaus F., 2014. "Beyond the Average: Peer Heterogeneity and Intergenerational Transmission of Education," IZA Discussion Papers 8695, Institute for the Study of Labor (IZA).
    18. Haliassos, Michael & Jansson, Thomas & Karabulut, Yigitcan, 2017. "Financial Literacy Externalities," Working Paper Series 333, Sveriges Riksbank (Central Bank of Sweden), revised 01 Oct 2017.
    19. Chakraborty, Tanika & Nottmeyer, Olga & Schüller, Simone & Zimmermann, Klaus F., 2014. "Beyond the Average: Peer Heterogeneity and Intergenerational Transmission of Education," IZA Discussion Papers 8695, Institute for the Study of Labor (IZA).
    20. Gerald J. Pruckner & Thomas Schober & Katrin Zocher, 2017. "The company you keep - Health behavior among work peers," Economics working papers 2017-07, Department of Economics, Johannes Kepler University Linz, Austria.
    21. Eliasson, Tove, 2014. "Immigrant entrepreneurship and the origin of bankers," Working Paper Series 2014:19, IFAU - Institute for Evaluation of Labour Market and Education Policy.

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