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State Dependence in Welfare Receipt: Transitions Before and After a Reform

  • Regina T. Riphahn
  • Christoph Wunder

We study state dependence in welfare receipt and investigate whether welfare transitions changed after a welfare reform. Using data from the German Socio-Economic Panel, we apply dynamic multinomial logit estimators and find that state dependence in welfare receipt is not a central feature of the German welfare system. We find that welfare transitions changed after the reform: transitions from welfare to employment became more likely and persistence in welfare and inactivity declined. We observe a large relative increase in transitions from employment to welfare. Immigrants’ responsiveness to the labor market situation increased after the reform.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4485.

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Date of creation: 2013
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Handle: RePEc:ces:ceswps:_4485
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  8. Jorgen Hansen & Magnus Lofstrom, 2009. "The dynamics of immigrant welfare and labor market behavior," Journal of Population Economics, Springer, vol. 22(4), pages 941-970, October.
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  20. Alan Barrett & Yvonne McCarthy, 2008. "Immigrants and welfare programmes: exploring the interactions between immigrant characteristics, immigrant welfare dependence, and welfare policy," Oxford Review of Economic Policy, Oxford University Press, vol. 24(3), pages 543-560, Autumn.
  21. Sabine Klinger & Thomas Rothe, 2012. "Der Rückgang der Langzeitarbeitslosigkeit in Deutschland: Ein Erfolg der Hartz-Reformen oder konjunktureller Effekt?," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(1), pages 89-121.
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  26. Dietz, Barbara, 1999. "Ethnic German Immigration from Eastern Europe and the former Soviet Union to Germany: the Effects of Migrant Networks," IZA Discussion Papers 68, Institute for the Study of Labor (IZA).
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