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The Immigrant Welfare Effect: Take-Up or Eligibility?

Author

Listed:
  • Bird, Edward J.

    (affiliation not available)

  • Kayser, Hilke

    (affiliation not available)

  • Frick, Joachim R.

    (DIW Berlin)

  • Wagner, Gert G.

    () (Max Planck Institute for Human Development)

Abstract

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.

Suggested Citation

  • Bird, Edward J. & Kayser, Hilke & Frick, Joachim R. & Wagner, Gert G., 1999. "The Immigrant Welfare Effect: Take-Up or Eligibility?," IZA Discussion Papers 66, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp66
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    References listed on IDEAS

    as
    1. 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.
    2. Klaus F. Zimmermann, 1995. "Tackling the European Migration Problems," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 45-62, Spring.
    3. 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.
    4. Zimmermann, Klaus F., 1998. "Immigration und Arbeitsmarkt: Eine oekonomische Perspektive," IZA Discussion Papers 7, Institute of Labor Economics (IZA).
    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. 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.
    7. Francine D. Blau, 1984. "The Use of Transfer Payments by Immigrants," ILR Review, Cornell University, ILR School, vol. 37(2), pages 222-239, January.
    8. 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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    Citations

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    Cited by:

    1. Axel Heitmueller, 2005. "Unemployment benefits, risk aversion, and migration incentives," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(1), pages 93-112, January.
    2. Muñoz de Bustillo, Rafael & Antón, José-Ignacio, 2009. "Immigration and Social Benefits in a Mediterranean Welfare State: The Case of Spain," MPRA Paper 13849, University Library of Munich, Germany.
    3. Thomas K. Bauer, 2002. "Migration, Sozialstaat und Zuwanderungspolitik," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(2), pages 249-271.
    4. Paweł Kaczmarczyk, 2013. "Are immigrants a burden for the state budget? Review paper," RSCAS Working Papers 2013/79, European University Institute.
    5. Hilke Almut Kayser & Joachim R. Frick, 2000. "Take It or Leave It: (Non-) Take-up Behavior of Social Assistance in Germany," Discussion Papers of DIW Berlin 210, DIW Berlin, German Institute for Economic Research.
    6. Euwals, Rob & Dagevos, Jaco & Gijsberts, Mérove & Roodenburg, Hans, 2007. "Immigration, Integration and the Labour Market: Turkish Immigrants in Germany and the Netherlands," IZA Discussion Papers 2677, Institute of Labor Economics (IZA).
    7. Rob Euwals & Hans Roodenburg & J. Dagevos & M. Gijsberts, 2006. "Immigration, integration and the labour market; Turkish immigrants in Germany and the Netherlands," CPB Discussion Paper 75, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Rob Euwals & Hans Roodenburg & J. Dagevos & M. Gijsberts, 2006. "Immigration, integration and the labour market; Turkish immigrants in Germany and the Netherlands," CPB Discussion Paper 75.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    9. Kaczmarczyk, Pawel, 2015. "Burden or Relief? Fiscal Impacts of Recent Ukrainian Migration to Poland," IZA Discussion Papers 8779, Institute of Labor Economics (IZA).
    10. Riphahn, Regina, 1999. "Immigrant Participation in Social Assistance Programs: Evidence from German Guestworkers," CEPR Discussion Papers 2318, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Immigration; social assistance; eligibility; take-up;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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