Empirical Economics

, Volume 50, Issue 4, pp 1303–1329 | Cite as

State dependence in welfare receipt: transitions before and after a reform

Article
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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.

Keywords

Social assistance State dependence Unemployment benefit II Immigration Dynamic multinomial logit 

JEL Classification

I38 J61 

Supplementary material

181_2015_977_MOESM1_ESM.pdf (88 kb)
Supplementary material 1 (pdf 87 KB)

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Copyright information

© Springer-Verlag Berlin Heidelberg 2015

Authors and Affiliations

  1. 1.University of Erlangen-NürnbergNurembergGermany
  2. 2.University of Halle-WittenbergHalleGermany

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