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State Dependence in Welfare Receipt: Transitions Before and After a Reform

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  • Riphahn, Regina T.

    (University of Erlangen-Nuremberg)

  • Wunder, Christoph

    (Martin-Luther University, Halle-Wittenberg)

Abstract

We study state dependence in welfare receipt and investigate whether welfare transitions changed after a welfare reform. Using data from the German Socio-Economic Panel, we apply dynamic multinomial logit estimators and find that state dependence in welfare receipt is not a central feature of the German welfare system. We find that welfare transitions changed after the reform: transitions from welfare to employment became more likely and persistence in welfare and inactivity declined. We observe a large relative increase in transitions from employment to welfare. Immigrants' responsiveness to the labor market situation increased after the reform.

Suggested Citation

  • Riphahn, Regina T. & Wunder, Christoph, 2015. "State Dependence in Welfare Receipt: Transitions Before and After a Reform," IZA Discussion Papers 9035, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp9035
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    Cited by:

    1. Kerstin Bruckmeier & Katrin Hohmeyer & Stefan Schwarz, 2018. "Welfare receipt misreporting in survey data and its consequences for state dependence estimates: new insights from linked administrative and survey data," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 52(1), pages 1-21, December.
    2. 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.
    3. 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.
    4. Mosthaf, Alexander & Schank, Thorsten & Schwarz, Stefan, 2021. "Do Supplementary Jobs for Welfare Recipients Increase the Chance of Welfare Exit? Evidence from Germany," IZA Discussion Papers 14268, Institute of Labor Economics (IZA).
    5. Bruckmeier, Kerstin & Hohmeyer, Katrin & Schwarz, Stefan, 2018. "Welfare receipt misreporting in survey data and its consequences for state dependence estimates: new insights from linked administrative and survey data," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages 1-16.
    6. Jennifer Feichtmayer & Regina T. Riphahn, 2023. "Intergenerational Transmission of Welfare Benefit Receipt: Evidence from Germany," SOEPpapers on Multidisciplinary Panel Data Research 1201, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Azarnert, Leonid V., 2018. "Refugee resettlement, redistribution and growth," European Journal of Political Economy, Elsevier, vol. 54(C), pages 89-98.
    8. Bruckmeier, Kerstin & Hohmeyer, Katrin & Schwarz, Stefan, 2018. "Welfare receipt misreporting in survey data and its consequences for state dependence estimates: new insights from linked administrative and survey data," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 52(1), pages .16(1-21).
    9. Ayşe Savaş & Julide Yildirim, 2017. "Education, Social Assistance And Employment Dynamics: A Panel Data Approach," EcoMod2017 10747, EcoMod.
    10. repec:iab:iabjlr:v:52:i:1:p:art.16 is not listed on IDEAS
    11. Sinem H. Ayhan & Selin Pelek, 2020. "State Dependence in Welfare Benefits in a Non‐Welfare Context," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(3), pages 711-735, September.
    12. Alexander Mosthaf & Thorsten Schank & Stefan Schwarz, 2024. "Do supplementary jobs for welfare recipients increase the chance of welfare exit? Evidence from Germany," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 63(3), pages 291-324, July.

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    More about this item

    Keywords

    unemployment benefit II; state dependence; social assistance; immigration; dynamic multinomial logit;
    All these keywords.

    JEL classification:

    • 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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