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Peer Effects in Welfare Dependence: Quasi-Experimental Evidence

Peer Effects in Welfare Dependence: Quasi-Experimental Evidence This paper examines peer effects in welfare use among refugees. We exploit a Swedish refugee placement policy, which generated exogenous variation in peer group composition. Our analysis distinguishes 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. Long-term welfare dependence increases if the individual is placed in a welfare dependent community. The number of contacts is either irrelevant or negatively related to welfare receipt; not controlling for residential self-selection yields the opposite conclusion. The results are very similar across household types and in different parts of the predicted earnings distribution. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resources University of Wisconsin Press

Peer Effects in Welfare Dependence: Quasi-Experimental Evidence

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Publisher
University of Wisconsin Press
ISSN
1548-8004

Abstract

This paper examines peer effects in welfare use among refugees. We exploit a Swedish refugee placement policy, which generated exogenous variation in peer group composition. Our analysis distinguishes 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. Long-term welfare dependence increases if the individual is placed in a welfare dependent community. The number of contacts is either irrelevant or negatively related to welfare receipt; not controlling for residential self-selection yields the opposite conclusion. The results are very similar across household types and in different parts of the predicted earnings distribution.

Journal

Journal of Human ResourcesUniversity of Wisconsin Press

Published: Apr 4, 2012

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