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Immigrant-Native Differences in Welfare Participation: The Role of Entry and Exit Rates

  • Hansen, Jörgen


    (Concordia University)

  • Lofstrom, Magnus


    (Public Policy Institute of California)

This paper analyzes differences in welfare transitions between natives and immigrants in Sweden using a large representative panel data set, LINDA, for the years 1991 to 2001. The data contains administrative information on welfare use, country of birth, and time of arrival in Sweden among other things, and provides an excellent opportunity to examine immigrant-native differences in welfare use. The empirical results suggest that the main reason for the large immigrant-native welfare gap observed in the data is differences in welfare entry rates. Thus, policies aimed to reduce these transitions may be particularly successful in reducing welfare use in general and the immigrant-native welfare gap in particular.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2261.

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Length: 50 pages
Date of creation: Aug 2006
Date of revision:
Publication status: published in: Industrial Relations, 2011, 50 (3), 412 - 442
Handle: RePEc:iza:izadps:dp2261
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  1. Arellano, M & Carrasco, R, 1996. "Binary Choice Panel Data Models with Predetermined Variables," Papers 9618, Centro de Estudios Monetarios Y Financieros-.
  2. Lofstrom, Magnus & Bean, Frank D., 2001. "Labor Market Conditions and Post-Reform Declines in Welfare Receipt Among Immigrants," IZA Discussion Papers 347, Institute for the Study of Labor (IZA).
  3. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
  4. Edin, P.-A. & Fredriksson, P., 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Papers 2000-19, Uppsala - Working Paper Series.
  5. Jörgen Hansen & Magnus Lofstrom, 2010. "Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate Into or Out-of Welfare," Working Papers id:2647, eSocialSciences.
  6. 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.
  7. Eberwein, Curtis & Ham, John C & LaLonde, Robert J, 1997. "The Impact of Being Offered and Receiving Classroom Training on the Employment Histories of Disadvantaged Women: Evidence from Experimental Data," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 655-82, October.
  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.
  9. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute for the Study of Labor (IZA).
  10. Plant, Mark W, 1984. "An Empirical Analysis of Welfare Dependence," American Economic Review, American Economic Association, vol. 74(4), pages 673-84, September.
  11. Borjas, George J & Hilton, Lynette, 1996. "Immigration and the Welfare State: Immigrant Participation in Means-Tested Entitlement Programs," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 575-604, May.
  12. Stephen V. Cameron & James J. Heckman, 2001. "The Dynamics of Educational Attainment for Black, Hispanic, and White Males," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 455-499, June.
  13. Bo E. Honoré & Ekaterini Kyriazidou, 2000. "Panel Data Discrete Choice Models with Lagged Dependent Variables," Econometrica, Econometric Society, vol. 68(4), pages 839-874, July.
  14. Ham, John C & LaLonde, Robert J, 1996. "The Effect of Sample Selection and Initial Conditions in Duration Models: Evidence from Experimental Data on Training," Econometrica, Econometric Society, vol. 64(1), pages 175-205, January.
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