Immigration and welfare state cash benefits

Purpose
– The purpose of this paper is to summarize existing evidence on welfare dependence among immigrants in Denmark and to produce new evidence with focus on the most recent years.
Design/methodology/approach
– The paper combines a broad descriptive/analytical approach with multivariate estimation on the impact on welfare dependence from individual background factors.
Findings
– The main finding is the importance of aggregate low unemployment for immigrants to assimilate out of welfare dependence. Fairly small effects are reported from policy changes intending to influence the economic incentives between welfare programs and jobs.
Research limitations/implications
– While panel data as used in the paper have a great potential, still a number of policy changes are not identified at the individual level. In further work it would be relevant to broaden the coverage including also some small policy programs and to extend the analysis to cover the period including the financial crisis years.
Social implications
– The paper has a potential to influence public attitudes in this area and to inform further public policy regarding benefit programs.
Originality/value
– The main new result is the finding, at a disaggregate level, of how changes in immigration policy and cyclical changes interact, influencing the assimilation into or out of dependence on cash benefit programs.