Arbeitspapier

The Dynamics of Social Assistance Benefit Receipt in Germany: State Dependence Before and After the 'Hartz Reforms'

In this article, I study state dependence in social assistance receipt in Germany using annual survey data from the German Socio-Economic Panel (SOEP) for the years 1995-2011. There is considerable observed state dependence, with an average persistence rate in benefits of 68% comparing to an average entry rate of just above 3%. To identify a possible structural component, I estimate a series of dynamic random-effects probit models that control for observed and unobserved heterogeneity and endogeneity of initial conditions. I find evidence of substantial structural state dependence in benefit receipt. Estimates suggest that benefit receipt one year ago is associated with an increase in the likelihood of benefit receipt today by a factor of 3.4. This corresponds to an average partial effect of 13 percentage points. Average predicted entry and persistence rates and the absolute level of structural state dependence are higher in Eastern Germany than in Western Germany. I find only little evidence for time variation in state dependence including for the years around the Hartz reforms.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 7977

Klassifikation
Wirtschaft
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Mobility, Unemployment, Vacancies, and Immigrant Workers: General
Unemployment: Models, Duration, Incidence, and Job Search
Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Thema
Germany
state dependence
welfare benefits
social assistance
Hartz reforms

Ereignis
Geistige Schöpfung
(wer)
Königs, Sebastian
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2014

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Königs, Sebastian
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2014

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