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The Immigrant Welfare Effect: Take-Up or Eligibility?

  • Bird, Edward J.

    (affiliation not available)

  • Kayser, Hilke

    (affiliation not available)

  • Frick, Joachim R.

    (DIW Berlin)

  • Wagner, Gert G.

    ()

    (DIW Berlin)

Are immigrants on welfare because they are more likely to be eligible or because they are more likely to claim benefits for which they are eligible? The answer is politically important, but because most current research on immigration and welfare is based on data from the U.S., the answer is difficult due to the complexities of the transfer system which make eligibility determinations difficult. In Germany, by contrast, eligibility for the main cash transfer program, Sozialhilfe (Social Assistance), is determined by a comparatively simple nation-wide formula. We use data from the German Socio-Economic Panel to test whether immigrants to Germany are more likely than natives to claim welfare benefits for which they are eligible. We find that immigrants are more likely than native Germans to receive welfare, both because immigrants are more likely to be eligible, and because they are more likely, when eligible, to claim their benefits. However, we also find that this greater propensity to take-up benefits is not related to immigrant status per se: when other socio-demographic factors are accounted for in an appropriate manner, immigrant households are no more likely to take up benefits than native households.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 66.

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Length: 36 pages
Date of creation: Oct 1999
Date of revision:
Publication status: published in: International Migration Review, 35 (2001), 726-748
Handle: RePEc:iza:izadps:dp66
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References listed on IDEAS
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  1. George J. Borjas & Lynette Hilton, 1995. "Immigration and the Welfare State: Immigrant Participation in Means- Tested Entitlement Programs," NBER Working Papers 5372, National Bureau of Economic Research, Inc.
  2. 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.
  3. Francine D. Blau, 1984. "The use of transfer payments by immigrants," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 37(2), pages 222-239, January.
  4. Joachim R. Frick & Timothy M. Smeeding & Gert G. Wagner, 1999. "Immigrants in Two Modern Nations: Characteristics of the Foreign and Native Born Populations in Germany and the United States," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 68(2), pages 297-307.
  5. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
  6. Wei-Yin Hu, 1998. "Elderly Immigrants on Welfare," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 711-741.
  7. George J. Borjas & Stephen J. Trejo, 1991. "Immigrant participation in the welfare system," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(2), pages 195-211, January.
  8. Zimmermann, Klaus F., 1998. "Immigration und Arbeitsmarkt: Eine oekonomische Perspektive," IZA Discussion Papers 7, Institute for the Study of Labor (IZA).
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