Peer Effects in Welfare Dependence: Quasi-Experimental Evidence
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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- Sendhil Mullainathan & Marianne Bertrand & Erzo F.P. Luttmer, 1998.
"Network Effects and Welfare Cultures,"
98-21, Massachusetts Institute of Technology (MIT), Department of Economics.
- Marianne Bertrand & Erzo F. P. Luttmer & Sendhil Mullainathan, 1999. "Network Effects and Welfare Cultures," Working Papers 9903, Harris School of Public Policy Studies, University of Chicago.
- Marianne Bertrand & Erzo F.P. Luttmer & Sendhil Mullainathan, 1998. "Network Effects and Welfare Cultures," NBER Working Papers 6832, National Bureau of Economic Research, Inc.
- Marianne Bertrand & Erzo F.P. Luttmer & Sendhil Mullainathan, 1999. "Network Effects and Welfare Cultures," JCPR Working Papers 62, Northwestern University/University of Chicago Joint Center for Poverty Research.
- Bertrand, M. & Luttmer, E.F.P. & Mullainathan, S., 1998. "Network Effects and Welfare Cultures," Papers 201, Princeton, Woodrow Wilson School - Public and International Affairs.
- 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.
- 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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