Ethnic Enclaves and Welfare Cultures - Quasi-Experimental Evidence

38 Pages Posted: 24 Mar 2005

See all articles by Olof Aslund

Olof Aslund

IFAU - Institute for Labour Market Policy Evaluation; IZA Institute of Labor Economics

Peter Fredriksson

Uppsala University - Department of Economics; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: March 2005

Abstract

We examine peer effects in welfare use among immigrants to Sweden by exploiting a governmental refugee placement policy. We distinguish between the quantity of contacts - the number of individuals of the same ethnicity - and the quality of contacts - welfare use among members of the ethnic group. OLS regressions suggest that both these factors are positively related to individual welfare use. Instrumental variables estimations yield the conclusion that only the quality of contacts matter. An increase of the fraction of the ethnic group on welfare by 10 percent raises the individual probability of welfare use by almost 7 percent.

Keywords: immigrants, welfare use, ethnic concentration, welfare cultures

JEL Classification: I38, J15

Suggested Citation

Aslund, Olof and Fredriksson, Peter, Ethnic Enclaves and Welfare Cultures - Quasi-Experimental Evidence (March 2005). Available at SSRN: https://ssrn.com/abstract=692005 or http://dx.doi.org/10.2139/ssrn.692005

Olof Aslund

IFAU - Institute for Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden
+46 18 471 70 89 (Phone)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Peter Fredriksson (Contact Author)

Uppsala University - Department of Economics ( email )

SE-75120 Uppsala
Sweden
+46 18 471 7079 (Phone)
+46 18 471 1478 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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