Patterns of Welfare Dependence Before and after a Reform: Evidence from First Generation Immigrants and Natives in Germany

Abstract

This paper studies the patterns of welfare dependence among first generation immigrants and natives in Germany before and after a substantial recent reform of the welfare system. Using data from the German Socio‐Economic Panel Study, the analysis presents life cycle trajectories of transfer receipt for immigrants and natives and studies the correlation between contextual factors and transfer receipt. We find no statistically significant differences in the probability of transfer receipt between immigrants and natives once socioeconomic characteristics are taken into account. Being a single parent, labor market status, and human capital are most closely correlated with the incidence of transfer receipt for both natives and immigrants. Interestingly, recent welfare reforms did not reverse prior patterns of welfare dependence.