Scandinavian Working Papers in Business Administration
Working Papers,
Örebro University, School of Business
No 2025:8: 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 ()
Additional contact information
Daniela Andrén: Örebro University School of Business, Postal: Örebro University, School of Business, SE - 701 82 ÖREBRO, Sweden
Thomas Andrén: Swedish Confederation of Professional Associations Saco, Postal: Swedish Confederation of Professional Associations Saco, Stockholm, Sweden
Martin Kahanec: Central European University Private University, Postal: Central European University Private University, Quellenstraße 51, A-1100 Wien, Austria
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.
Language: English
35 pages, May 20, 2025
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