Decomposing Welfare Wedges: An Analysis of Welfare Dependence of Immigrants and Natives in Europe

26 Pages Posted: 26 Jan 2016

See all articles by Peter Huber

Peter Huber

Austrian Institute of Economic Research (WIFO); Mendel University in Brno

Doris Oberdabernig

Austrian Institute of Economic Research (WIFO)

Date Written: February 2016

Abstract

We study the reasons for differences in welfare benefit receipt between immigrants and natives in 16 EU countries using Oaxaca‐Blinder decompositions of a Heckman model. Differences in welfare benefit receipt diminish or disappear altogether after controlling for differences in characteristics of the two groups. The largest part of this is explained by differences in benefit take‐up rather than benefit levels conditional on benefit receipt. The characteristics contributing most to native–immigrant welfare wedges in contributory benefits are differences in age. For non‐contributory benefits, differences in household size and composition are most important. Overall results thus suggest a limited capability of selective immigration policies to reduce welfare benefit receipt among immigrants.

Suggested Citation

Huber, Peter and Oberdabernig, Doris, Decomposing Welfare Wedges: An Analysis of Welfare Dependence of Immigrants and Natives in Europe (February 2016). Kyklos, Vol. 69, Issue 1, pp. 82-107, 2016, Available at SSRN: https://ssrn.com/abstract=2722275 or http://dx.doi.org/10.1111/kykl.12104

Peter Huber (Contact Author)

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

Mendel University in Brno ( email )

Zemedelska 1
Brno, South Moravia 61200
Czech Republic

Doris Oberdabernig

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

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