A Combined Macro- and Micro-level Analysis of the Relationship between Unemployment and Means-Tested Social Assistance in Sweden

Abstract

In an era of mass unemployment, the economic consequences of unemployment for the unemployed are of central relevance for the analysis of inequality and social stratification. This paper analyses the individual-level economic consequences of unemployment and poverty in Sweden, concentrating on economic hardship and poverty measured in terms of recipiency of means-tested social assistance. By use of aggregate time-series analysis of the period between 1924 and 1993, and an analysis of individual-level longitudinal interview data from 1990 to 1992, it is possible to integrate macro- and micro-data in the analysis. The paper shows how such an integration can be used to cross-check results from these two levels and thereby to mitigate different methodological problems associated with analyses at only one level. Micro-level results are found to be congruent with the macro-level outcomes indicating that it is of crucial importance to separate the stock from the flow of welfare recipients in order to understand the processes behind unemployment, persistent hardship, and dependency on means-tested social assistance.