Welfare Dependency Among Immigrants to Norway: A Panel Data Study of Transfer Shares

Using Norwegian panel data, we specify and estimate transfer share equations for immigrants belonging to different subgroups. The share measures how import transfers are relative to a gross income concept incorporating transfers and gross income coming from labor market participation. For both genders, we consider three types of immigrants: refugees, individuals immigrating for reunification with refugees and individuals immigrating because of work. The transfer share for an individual depends on different characteristics of it. The explanatory variables we consider are related to age, duration of stay in Norway, family composition, educational attainment and area of geographical residence in Norway. Unobserved individual-specific heterogeneity is represented by random effects. Of special concern, not at least from a policy point of view, is the effect of duration of stay on the transfer shares. For refugees and individuals reunifying with refugees we find, at least for a substantial number of years, that the transfer share decreases as the duration of stay becomes longer. An essential part of the analysis is that we compare the effects across gender. Among the refugees we find that the effect of duration of stay is quite similar for men and women.