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Immigrant Responses to Social Insurance Generosity

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  • Bratsberg, Bernt
  • Raaum, Oddbjørn
  • Røed, Knut

Abstract

Immigrants from low-income source countries tend to be underrepresented in employment and overrepresented in social insurance programs. Based on administrative data from Norway, we examine whether such gaps reflect systematic differences in impacts of social insurance benefits on work incentives. Drawing on a reform of the temporary disability insurance program, we identify negative employment and earnings effects of higher benefits. While behavioral responses are significantly larger for immigrants, these immigrant-native differentials are largely explained by differences in earnings prospects, family structure, and job opportunities. We also uncover cross effects of benefits on the labor supply of spouses, amplifying the adverse effects on family earnings.

Suggested Citation

  • Bratsberg, Bernt & Raaum, Oddbjørn & Røed, Knut, 2020. "Immigrant Responses to Social Insurance Generosity," Labour Economics, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:labeco:v:65:y:2020:i:c:s0927537120300580
    DOI: 10.1016/j.labeco.2020.101854
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    Cited by:

    1. Dias, Felipe A & Chance, Joseph, 2021. "COVID-19, Public Charge Rules, and Immigrant Employment in the United States," Institute for Research on Labor and Employment, Working Paper Series qt37f8w4sf, Institute of Industrial Relations, UC Berkeley.
    2. Åslund, Olof & Larsson, Fredrik & Laun, Lisa, 2024. "Joining late, leaving early? Immigrant-native disparities in labor market exit," Labour Economics, Elsevier, vol. 89(C).
    3. Bratsberg, Bernt & Raaum, Oddbjørn & Røed, Knut, 2020. "Immigrant Responses to Social Insurance Generosity," Labour Economics, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Immigrants; Labor supply; Social insurance;
    All these keywords.

    JEL classification:

    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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