Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate into or Out of Welfare?

54 Pages Posted: 7 Feb 2000

See all articles by Jorgen Hansen

Jorgen Hansen

Concordia University, Quebec - Department of Economics; IZA Institute of Labor Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

Magnus Lofstrom

Public Policy Institute of California; Institute for the Study of Labor (IZA)

Date Written: December 1999

Abstract

This paper analyzes differences in welfare utilization between immigrants and natives in Sweden using a large panel data set, LINDA, for the years 1990 to 1996. Both welfare expenditures and immigration increased substantially in Sweden in the 1990's. We find that immigrants use welfare to a greater extent than natives and that non-refugee immigrants utilize social assistance less than refugee immigrants. Differences in welfare participation and number of months on welfare between immigrants and natives cannot be explained by observable socioeconomic characteristics. Using a random effects probit model, we find that immigrants lower their participation rates in welfare with time spent in Sweden. Refugees display substantially higher public assistance participation rates upon arrival in Sweden compared to non-refugee immigrants, but they assimilate out of welfare at a faster rate than non-refugee immigrants. Neither immigrant group is predicted to reach the participation rates of native households within a 20 year period in Sweden. A fixed effects logit model supports these findings. The predicted differences in the length of social assistance spells follow a very similar pattern. Simulations of the move to a national uniform benefits structure in 1998 show a decrease in the participation rate and in expenditures.

JEL Classification: H53, I30, I38, J15, J61

Suggested Citation

Hansen, Jorgen and Lofstrom, Magnus, Immigrant Assimilation and Welfare Participation: Do Immigrants Assimilate into or Out of Welfare? (December 1999). IZA Discussion Paper No. 100. Available at SSRN: https://ssrn.com/abstract=201849

Jorgen Hansen

Concordia University, Quebec - Department of Economics ( email )

1455 de Maisonneuve Blvd. W.
Montreal, Quebec H3G 1MB
Canada
514-848-3924 (Phone)
514-848-4536 (Fax)

IZA Institute of Labor Economics

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

Center for Interuniversity Research and Analysis on Organization (CIRANO) ( email )

2020 rue University, 25th floor
Montreal H3C 3J7, Quebec
Canada

Magnus Lofstrom (Contact Author)

Public Policy Institute of California ( email )

500 Washington Street
Suite 800
San Francisco, CA 94111
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany
+49 228 3894 303 (Phone)
+49 228 3894 210 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
204
Abstract Views
2,694
rank
146,534
PlumX Metrics