[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp360.html
   My bibliography  Save this paper

The Dynamics of Immigrant Welfare and Labor Market Behavior

Author

Listed:
  • Hansen, Jörgen

    (Concordia University)

  • Lofstrom, Magnus

    (Public Policy Institute of California)

Abstract
This paper analyzes transitions into and out of 3 different labor market states, social assistance, unemployment and employment. We estimate a dynamic multinomial logit model, controlling for endogenous initial condition and unobserved heterogeneity, using a large representative Swedish panel data set, LINDA, for the years 1990 to 1996. The unadjusted data indicates that immigrants are more likely to receive both social assistance and unemployment compensation than natives. Immigrants are less likely to remain employed in consecutive years than natives and are more likely to stay on welfare and to receive unemployment insurance in a year, given participation in the previous year. The empirical results suggest that refugee immigrants display a greater degree of "structural" state dependence than natives. Further, immigrants from non-refugee countries display a similar degree of "structural" state dependence as natives. The high welfare participation rates among refugee immigrants seem to be due to the existence of a "welfare trap", while participation among natives and non-refugee immigrants is largely due to permanent unobserved characteristics. These results suggest that welfare reforms will have differential effects on refugee immigrants and natives.

Suggested Citation

  • Hansen, Jörgen & Lofstrom, Magnus, 2001. "The Dynamics of Immigrant Welfare and Labor Market Behavior," IZA Discussion Papers 360, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp360
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp360.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hilary Williamson Hoynes, 2000. "Local Labor Markets And Welfare Spells: Do Demand Conditions Matter?," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 351-368, August.
    2. Arellano, Manuel & Honore, Bo, 2001. "Panel data models: some recent developments," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 53, pages 3229-3296, Elsevier.
    3. Per-Anders Edin & Robert J. LaLonde & Olof Aslund, 2000. "Emigration of Immigrants and Measures of Immigrant Assimilation: Evidence from Sweden," Working Papers 0020, Harris School of Public Policy Studies, University of Chicago.
    4. O'Neill, June A & Bassi, Laurie J & Wolf, Douglas A, 1987. "The Duration of Welfare Spells," The Review of Economics and Statistics, MIT Press, vol. 69(2), pages 241-248, May.
    5. 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.
    6. Robert M. Hutchens, 1981. "Entry and Exit Transitions in a Government Transfer Program: The Case of Aid to Families with Dependent Children," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 217-237.
    7. George J. Borjas & Lynette Hilton, 1996. "Immigration and the Welfare State: Immigrant Participation in Means-Tested Entitlement Programs," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 575-604.
    8. Daniel McFadden & Kenneth Train, 2000. "Mixed MNL models for discrete response," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 15(5), pages 447-470.
    9. Jorgen Hansen & Magnus Lofstrom, 2003. "Immigrant Assimilation and Welfare Participation Do Immigrants Assimilate Into or Out of Welfare?," Journal of Human Resources, University of Wisconsin Press, vol. 38(1).
    10. Edin, P.-A. & Fredriksson, P., 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Papers 2000:19, Uppsala - Working Paper Series.
    11. Card, David & Sullivan, Daniel G, 1988. "Measuring the Effect of Subsidized Training Programs on Movements in and out of Employment," Econometrica, Econometric Society, vol. 56(3), pages 497-530, May.
    12. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    13. Bauer, Thomas K. & Lofstrom, Magnus & Zimmermann, Klaus F., 2000. "Immigration Policy, Assimilation of Immigrants and Natives' Sentiments towards Immigrants: Evidence from 12 OECD-Countries," IZA Discussion Papers 187, Institute of Labor Economics (IZA).
    14. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
    15. Jorgen Hansen & Magnus Lofstrom, 2011. "Immigrant–Native Differences in Welfare Participation: The Role of Entry and Exit Rates," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(3), pages 412-442, July.
    16. Enberg, John & Gottschalk, Peter & Wolf, Douglas, 1990. "A random-effects logit model of work-welfare transitions," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 63-75.
    17. Rebecca M. Blank & Patricia Ruggles, 1996. "When Do Women Use Aid to Families with Dependent Children and Food Stamps? The Dynamics of Eligibility Versus Participation," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 57-89.
    18. Plant, Mark W, 1984. "An Empirical Analysis of Welfare Dependence," American Economic Review, American Economic Association, vol. 74(4), pages 673-684, September.
    19. Kenneth Y. Chay & Dean R. Hyslop, 2014. "Identification and Estimation of Dynamic Binary Response Panel Data Models: Empirical Evidence Using Alternative Approaches," Research in Labor Economics, in: Safety Nets and Benefit Dependence, volume 39, pages 1-39, Emerald Group Publishing Limited.
    20. Blank, Rebecca M., 1989. "Analyzing the length of welfare spells," Journal of Public Economics, Elsevier, vol. 39(3), pages 245-273, August.
    21. Daniel Meyer, 1993. "Child support and welfare dynamics: Evidence from Wisconsin," Demography, Springer;Population Association of America (PAA), vol. 30(1), pages 45-62, February.
    22. Bo E. Honoré & Ekaterini Kyriazidou, 2000. "Panel Data Discrete Choice Models with Lagged Dependent Variables," Econometrica, Econometric Society, vol. 68(4), pages 839-874, July.
    23. Robert Plotnick, 1983. "Turnover in the AFDC Population: An Event History Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 18(1), pages 65-81.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jorgen Hansen & Magnus Lofstrom, 2011. "Immigrant–Native Differences in Welfare Participation: The Role of Entry and Exit Rates," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(3), pages 412-442, July.
    2. Islam, Nizamul, 2005. "Dynamic labour force participation of married women in Sweden," Working Papers in Economics 184, University of Gothenburg, Department of Economics, revised 10 Jul 2007.
    3. Bernt Bratsberg & Oddbjørn Raaum & Knut Røed, 2010. "When Minority Labor Migrants Meet the Welfare State," Journal of Labor Economics, University of Chicago Press, vol. 28(3), pages 633-676, July.
    4. Arellano, Manuel & Carrasco, Raquel, 2003. "Binary choice panel data models with predetermined variables," Journal of Econometrics, Elsevier, vol. 115(1), pages 125-157, July.
    5. Herwig Immervoll & Stephen P. Jenkins & Sebastian Königs, 2015. "Are Recipients of Social Assistance 'Benefit Dependent'?: Concepts, Measurement and Results for Selected Countries," OECD Social, Employment and Migration Working Papers 162, OECD Publishing.
    6. Ziliak, Stephen T., 1997. "Kicking the Malthusian vice: Lessons from the abolition of "welfare" in the late nineteenth century," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(2), pages 449-468.
    7. Mairead Reidy & Lucy Mackey-Bilaver & Robert M. Goerge & Yizu Yeh & Bong Joo Lee, 1998. "The Dynamics of AFDC, Medicaid, and Food Stamps: A Preliminary Report," JCPR Working Papers 48, Northwestern University/University of Chicago Joint Center for Poverty Research.
    8. Akay, Alpaslan, 2009. "The Wooldridge Method for the Initial Values Problem Is Simple: What About Performance?," IZA Discussion Papers 3943, Institute of Labor Economics (IZA).
    9. Mark C. Berger & Dan A. Black, 1998. "The Duration Of Medicaid Spells: An Analysis Using Flow And Stock Samples," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 667-675, November.
    10. Akay, Alpaslan, 2009. "Dynamics of the Employment Assimilation of First-Generation Immigrant Men in Sweden: Comparing Dynamic and Static Assimilation Models with Longitudinal Data," IZA Discussion Papers 4655, Institute of Labor Economics (IZA).
    11. Pierre-Carl Michaud & Konstantinos Tatsiramos, 2005. "Employment Dynamics of Married Women in Europe," Working Papers WR-273, RAND Corporation.
    12. Islam, Nizamul, 2007. "A Dynamic Tobit Model of Female Labor Supply," Working Papers in Economics 259, University of Gothenburg, Department of Economics.
    13. Jeffrey Grogger, 2004. "Welfare transitions in the 1990s: The economy, welfare policy, and the EITC," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(4), pages 671-695.
    14. Sari Pekkala Kerr & William R. Kerr, 2011. "Economic Impacts of Immigration: A Survey," Finnish Economic Papers, Finnish Economic Association, vol. 24(1), pages 1-32, Spring.
    15. M. Klawitter & R. Plotnick & M. Edwards, "undated". "Determinants of welfare entry and exit by young women," Institute for Research on Poverty Discussion Papers 1099-96, University of Wisconsin Institute for Research on Poverty.
    16. Manudeep Bhuller & Christian N. Brinch & Sebastian Königs, 2017. "Time Aggregation and State Dependence in Welfare Receipt," Economic Journal, Royal Economic Society, vol. 127(604), pages 1833-1873, September.
    17. García-Pérez, J. Ignacio, 2012. "Economic Conditions and Employment Dynamics of Immigrants versus Natives: Who Pays the Costs of the "Great Recession"?," UC3M Working papers. Economics we1232, Universidad Carlos III de Madrid. Departamento de Economía.
    18. Hilary W. Hoynes & Kenneth Y. Chay & Dean Hyslop, 2004. "True State Dependence In Monthly Welfare Participation:A Nonexperimental Analysis," Working Papers 533, University of California, Davis, Department of Economics.
    19. Abdurrahman Aydemir, 2013. "Skill-based immigrant selection and labor market outcomes by visa category," Chapters, in: Amelie F. Constant & Klaus F. Zimmermann (ed.), International Handbook on the Economics of Migration, chapter 23, pages 432-452, Edward Elgar Publishing.
    20. Marianne E. Page & Joanne Spetz & Jane Millar, 2005. "Does the minimum wage affect welfare caseloads?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(2), pages 273-295.

    More about this item

    Keywords

    Welfare; labor market behavior; transition; state dependence; immigration;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp360. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.