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Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate Into or Out-of Welfare

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  • Jörgen Hansen
  • Magnus Lofstrom

Abstract

This paper analyzes differences in welfare utilization between immigrants and natives in Sweden using a large panel data set, LINDA, for the years 1990 to 1996. Both welfare expenditures and immigration increased in Sweden in the 1990’s. We find that immigrants use welfare to a greater extent than natives and that non-refugee immigrants utilize social assistance less than refugee immigrants. Differences in welfare participation and number of months on welfare between immigrants and natives cannot be explained by observable socioeconomic characteristics. Using a random effects probit model, we find that immigrants lower their participation rates in welfare with time spent in Sweden. Refugees display substantially higher public assistance participation rates upon arrival in Sweden compared to non-refugee immigrants, but they assimilate out-of welfare at a faster rate than non-refugee immigrants. Neither immigrant group is predicted to reach the participation rates of native households within a 20 year period in Sweden. A fixed effects logit model supports these findings. The predicted differences in the length of social assistance spells follow a very similar pattern. Simulations of the move to a national uniform benefits structure in 1998 show a decrease in the participation rate and in expenditures. [IZA Discussion Paper No. 100]

Suggested Citation

  • Jörgen Hansen & Magnus Lofstrom, 2010. "Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate Into or Out-of Welfare," Working Papers id:2647, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:2647
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    References listed on IDEAS

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    1. Michael Baker & Dwayne Benjamin, 1995. "The Receipt of Transfer Payments by Immigrants to Canada," Journal of Human Resources, University of Wisconsin Press, vol. 30(4), pages 650-676.
    2. S. A. Maani, 1993. "Immigrants and the Use of Government Transfer Payments," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 26(4), pages 65-76.
    3. Borjas, George J. & Trejo, Stephen J., 1993. "National origin and immigrant welfare recipiency," Journal of Public Economics, Elsevier, vol. 50(3), pages 325-344, March.
    4. George J. Borjas & Stephen J. Trejo, 1991. "Immigrant Participation in the Welfare System," ILR Review, Cornell University, ILR School, vol. 44(2), pages 195-211, January.
    5. George J. Borjas & Lynette Hilton, 1996. "Immigration and the Welfare State: Immigrant Participation in Means-Tested Entitlement Programs," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 575-604.
    6. Julian R. Betts & Magnus Lofstrom, 2000. "The Educational Attainment of Immigrants: Trends and Implications," NBER Chapters,in: Issues in the Economics of Immigration, pages 51-116 National Bureau of Economic Research, Inc.
    7. Thomas F. Crossley & James Ted McDonald & Christopher Worswick, 2001. "Immigrant Benefit Receipt Revisited: Sensitivity to the Choice of Survey Years and Model Specification," Journal of Human Resources, University of Wisconsin Press, vol. 36(2), pages 379-397.
    8. George J. Borjas, 1994. "Immigration and Welfare, 1970-1990," NBER Working Papers 4872, National Bureau of Economic Research, Inc.
    9. Borjas, George J, 1985. "Assimilation, Changes in Cohort Quality, and the Earnings of Immigrants," Journal of Labor Economics, University of Chicago Press, vol. 3(4), pages 463-489, October.
    10. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
    11. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    12. Francine D. Blau, 1984. "The Use of Transfer Payments by Immigrants," ILR Review, Cornell University, ILR School, vol. 37(2), pages 222-239, January.
    13. Wei-Yin Hu, 1998. "Elderly Immigrants on Welfare," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 711-741.
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    More about this item

    Keywords

    Welfare; immigration; assimilation; panel data;

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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