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Labor Market Conditions and Post-Reform Declines in Welfare Receipt Among Immigrants

Author

Listed:
  • Lofstrom, Magnus

    () (Public Policy Institute of California)

  • Bean, Frank D.

    () (University of California, Irvine)

Abstract

Considerable research attention has been devoted to the question of whether and to what extent changes in welfare policy legislated in the 1990s might have deterred immigrant participation in welfare programs, although only post-1996 immigrants were explicitly targeted by most of the changes. Some analysts have argued that such so-called chilling effects have lowered immigrant participation, and others have argued that this is true only in California. This paper analyzes the role of local labor market conditions in explaining declines in the welfare participation trends of immigrants and reductions in the nativity participation gap for the period 1994 to 1999. The data, extracted from the March Current Population Survey, indicate that immigrants’ participation in welfare declined more rapidly than natives’ during the latter half of the decade. Our results show that variation in the unemployment and employment rates across MSAs and states explain the observed relative post-welfare reform decrease among immigrants, with immigrant welfare utilization being sensitive to changes in both employment and unemployment rates. The inclusion of state fixed effects in probability models suggests that the relative decline among immigrants is not due to unobservable heterogeneity across states, but rather to differences in local labor market conditions. The policy implications of the findings are discussed.

Suggested Citation

  • 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).
  • Handle: RePEc:iza:izadps:dp347
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    Cited by:

    1. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth And Asset Holdings Of U.S.-Born And Foreign-Born Households: Evidence From Sipp Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 17-42, March.
    2. Cécile BATISSE & Nong ZHU, 2009. "L’effet des politiques sociales sur l’emploi des nouveaux immigrants à Montréal :une analyse longitudinale et conjoncturelle," Working Papers 200925, CERDI.
    3. Kerstin Gerst & Jeffrey Burr, 2011. "Welfare Use Among Older Hispanic Immigrants: The Effect of State and Federal Policy," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 30(1), pages 129-150, February.
    4. Jorgen Hansen & Magnus Lofstrom, 2011. "Immigrant–Native Differences in Welfare Participation: The Role of Entry and Exit Rates," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(3), pages 412-442, July.
    5. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
    6. Nong Zhu & Cecile Batisse, 2014. "L'effet des politiques sociales sur l'emploi des nouveaux immigrants à Montréal," CIRANO Working Papers 2014s-05, CIRANO.
    7. Nong Zhu & Cécile Batisse, 2011. "L'effet des politiques sociales sur l'emploi des nouveaux immigrants à Montréal :une analyse longitudinale et conjoncturelle," Working Papers halshs-00554261, HAL.

    More about this item

    Keywords

    Immigrant welfare; labor market conditions; welfare reform;

    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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