Refugee Benefit Cuts

Author:

Dustmann Christian1,Landersø Rasmus2,Andersen Lars Højsgaard2

Affiliation:

1. Centre for Research and Analysis of Migration (CReAM), University College London, and ROCKWOOL Foundation Berlin (RFBerlin) (email: )

2. ROCKWOOL Foundation Research Unit (email: )

Abstract

This paper analyzes the effects of Denmark’s Start Aid welfare reform that targets refugees. Implemented in 2002, it enables us to study not only the reform’s immediate effects but also its longer-term consequences and its repeal a decade later. The reform-induced large transfer cuts led to an increase in employment rates, but only in the short run. Overall, the reform increased poverty rates and led to a rise in subsistence crime. Moreover, local demand conditions generate substantial heterogeneity in the reform’s effects on immediate and longer-term employment. (JEL I32, I38, J15, J22, J64, K42)

Publisher

American Economic Association

Reference64 articles.

1. The Welfare Magnet Hypothesis: Evidence from an Immigrant Welfare Scheme in Denmark

2. Andersen, Lars H., Hans Hansen, Marie Louise Schultz-Nielsen, and Torben Tranæs. 2012. "Starthjælpens Betydning for Flygtninges Levevilkår og Beskæftigelse." Rockwool Fondens Forskningsenhed Arbejdspapir 25.

3. Determining Participation in Income-Tested Social Programs

4. Do When and Where Matter? Initial Labour Market Conditions and Immigrant Earnings

5. Local labour demand and immigrant employment

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