Structural State Dependence in Social Assistance through the Lens of Couples’ Ethnic Composition. Evidence from Swedish Panel Data

Daniela Andrén (), Thomas Andrén () and Martin Kahanec ()
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Daniela Andrén: Örebro University School of Business, Postal: Örebro University, School of Business, SE - 701 82 ÖREBRO, Sweden, https://www.oru.se/english/employee/daniela_andren/
Thomas Andrén: Swedish Confederation of Professional Associations Saco, Postal: Swedish Confederation of Professional Associations Saco, Stockholm, Sweden, https://www.saco.se/om-saco/kontakt/personal/samhallspolitiska-avdelningen/thomas-andren/
Martin Kahanec: Central European University Private University, Postal: Central European University Private University, Quellenstraße 51, A-1100 Wien, Austria, https://people.ceu.edu/martin_kahanec

No 2025:8, Working Papers from Örebro University, School of Business

Abstract: This study investigates whether couple ethnic composition shapes household welfare dependence, a relevant dimension overlooked in previous studies. Using fifteen years of Swedish panel data and a dynamic discrete-choice model that addresses initialconditions and unobserved heterogeneity, we analyze structural state dependence in social assistance across households of intra-ethnic and inter-ethnic couples. Consistent with previous studies, we find that thatwelfare participation is much higher for foreign-born individuals in both intra- and inter-ethnic couples than for couples of natives. However, the lowest structural state dependence in social assistance was found for households of inter-ethnic couples, while individuals from couples of natives show the strongest state dependence, nearly five times higher than for households of couples comprising foreign-born women with Swedish-born men and stable couples of foreign-born men and Swedish-born women. Our findings offer important policy implications for addressing social assistance needs across diverse household configurations in increasingly multicultural and fiscally constrained societies. Policy and political discourse focused primarily on reducing immigrants’ welfare dependency may be misguided, as households of native-born individuals exhibit stronger structural state dependence despite lower overall participation rates. Policymakers should broaden their focus to include households of couples of natives in efforts to reduce welfare persistence.

Keywords: structural state dependence; social assistance; intra-ethnic; inter-ethnic; household. (search for similar items in EconPapers)
JEL-codes: I30 I38 J18 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2025-05-20
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:oruesi:2025_008

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