Structural State Dependence in Social Assistance through the Lens of Couples’ Ethnic Composition. Evidence from Swedish Panel Data

This study investigates whether couple ethnic composition shapes household welfare dependence, a relevant dimension overlooked in previous studies. Using fifteen years of Swedish panel data and a dynamic discrete-choice model that addresses initial-conditions and unobserved heterogeneity, we analyze structural state dependence in social assistance across households of intra-ethnic and inter-ethnic couples. Consis-tent with previous studies, we find that thatwelfare participation is much higher for foreign-born individuals in both intra- and inter-ethnic couples than for couples of na-tives. However, the lowest structural state dependence in social assistance was found for households of inter-ethnic couples, while individuals from couples of natives show the strongest state dependence, nearly five times higher than for households of couples com-prising foreign-born women with Swedish-born men and stable couples of foreign-born men and Swedish-born women. Our findings offer important policy implications for ad-dressing social assistance needs across diverse household configurations in increasingly multicultural and fiscally constrained societies. Policy and political discourse focused primarily on reducing immigrants’ welfare dependency may be misguided, as house-holds of native-born individuals exhibit stronger structural state dependence despite lower overall participation rates. Policymakers should broaden their focus to include households of couples of natives in efforts to reduce welfare persistence.