The welfare use of immigrants and natives in Germany

Christoph Wunder 1, Monika Sander2, Regina Riphahn1
1University of Erlangen-Nuremberg, Germany, 2University of Bamberg, Germany

This paper analyzes the welfare use of immigrants and natives in Germany. We describe the system of minimum income protection and explain the changes to the previous system introduced by the labor market reforms between 2003 and 2005 (the “Hartz” reform package). Using data from the German Socio-Economic Panel Study, the analysis graphically illustrates life cycle trajectories of transfer receipt for immigrants and natives, and studies the empirical linkage between contextual factors and transfer receipts. We find no evidence of statistically significant differences in the probability of transfer receipt between immigrants and natives, once the socioeconomic characteristics of the household are taken into account. In general, the labor market status and human capital variables are correlated with the incidence of transfer receipt. Moreover, households with children, and particularly single parent households, are more likely to receive transfers.

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