The Receipt of Transfer Payments by Immigrants in Sweden

Abstract

Using the native‐born as a benchmark, this article examines the reliance of immigrants on Sweden’s social safety net. Both in the raw data, and after conditioning on a number of explanatory variables, we find that there are differences between immigrants and natives regarding participation in the Swedish income security system. We also find that there are differences in this respect between immigrants from different regions as well as between more recent and earlier cohorts of immigrants. As regards unemployment insurance benefits and cash labour market assistance, no clear pattern can be discerned in the results. In the case of early retirement pension and social assistance, however, the picture looks different. Immigrants arriving at an early date from typical labour immigration regions are over‐represented in early retirement. Immigrants, especially non‐European immigrants with a recent date of arrival, are over‐represented among recipients of social assistance. The overall conclusion is that the immigrants’ total rate of participation in the income security system is determined by their rate of unemployment and their state of health. On the other hand, the distribution of their participation among the different components of the income security system is highly dependent on their length of residence in Sweden and where they come from.