Hansen and Lofstrom 79
Figure 2 Real Expenditures on Social Assistance in Sweden, 1983–98, in 1996 SEK
Source: National Board of Health and Welfare, Social Assistance, Table 1, 1998.
in Sweden and served as guidelines for the social worker, who decided the actual size of the benefits. SA benefits were paid according to a schedule that set a guaran-
teed amount for a family of a given size. These benefits were reduced at a 100 percent reduction rate as the family’s income rose.
Expenditures on social assistance have increased quite substantially in Sweden during the last 15 years. In Figure 2, we show total expenditures on SA from 1983
to 1998. During the 1980s, total expenditures on welfare increased by more than 30 percent. However, the most rapid increase in expenditures took place in the 1990s.
Between 1990 and 1996, welfare costs increased by roughly 100 percent. In 1996, 11.9 billion SEK was spent on social assistance, or approximately 2 percent of all
government expenditures.
Figure 2 also divides welfare expenditures separately for native Swedes and immi- grants. Clearly, welfare expenditures increased at a much faster pace for immigrants
than for native-born Swedes between 1983 and 1998. Throughout the 1990s, immi- grants and natives accounted for about the same amount of welfare expenditures.
This is quite remarkable given that immigrants represent a 10 percent minority of the population in Sweden.
IV. Data
A. Description of the Data and Sampling Procedures
The data used in this paper are taken from a recently created Swedish longitudinal data set, Longitudinal Individual Data LINDA. LINDA is a register-based data set
80 The Journal of Human Resources
and it consists of a large panel of individuals and their household members, which are representative for the population from 1960 to 1996. LINDA is a joint endeavor
between the Department of Economics at Uppsala University, The National Social Insurance Board RFV, Statistics Sweden, and the Ministries of Finance and Labor.
The main administrator of the data set is Statistics Sweden. For a more detailed description of the data used here, including the sampling structure, see Edin and
Fredriksson 2000.
LINDA contains a 3 percent representative random sample of the Swedish popula- tion, corresponding to approximately 300,000 individuals for the period studied here.
The sampled population consists of all individuals, including children and elderly persons, who lived in Sweden during a particular year. The sampling procedure used
in constructing the panel data set ensures that each cross-section is representative for the population in each year. Attached to LINDA is a nonoverlapping representa-
tive random sample of immigrants containing the same variables, and created in the same fashion, as the general sample. The immigrant sample consists of 20 percent
of all individuals born abroad. We merged this sample with the general population sample. This generated a sample of the Swedish population in which immigrants
are overrepresented. The overrepresentation can be adjusted for by using appropriate methods.
The sample used in this study consists of information from LINDA for the year 1990–96.
5
We excluded all households in which the sampled person is younger than 18 years or older than 65 years. Because welfare participation in Sweden is based
on household characteristics and household income, the appropriate unit of observa- tion is the household. A common approach in the literature is to let the household be
represented by the household head, meaning that the characteristics of the household coincide with those of the household head. However, we are not able to identify the
head of the household in LINDA and instead we let the household be represented by the sampled individual. This means that the value of different observable charac-
teristics, such as age and education, in the subsequent analysis refer to the person in the household that was originally sampled. Furthermore, a household is defined
as an immigrant household if the sampled person was born abroad, and as a refugee household if he was born in a refugee country, as defined by the Swedish Immigration
Board, or in a sub-Saharan country.
6
If the person representing the household is an immigrant or a refugee, we have information about the year of arrival in Sweden.
7
We also estimated models with a slightly different definition of an immigrant house- hold in which the household was defined to be an immigrant household if any house-
hold member was an immigrant. This appears to have no impact on the analysis presented below.
5. We lack information about welfare use prior to 1990. 6. The countries defined by the Swedish Immigration Board as refugee countries: Ethiopia, Afghanistan,
Bulgaria, Bangladesh, Bosnia, Chile, Sri Lanka, Cuba, Iraq, Iran, India, Yugoslavia, China, Croatia, Leba- non, Moldavia, Peru, Pakistan, Poland, Russia, Soviet Union, Romania, Somalia, Syria, Togo, Turkey,
Ukraine, Uganda, and Vietnam. 7. All immigrant households included in LINDA, whether defined as refugees or not, have obtained resi-
dence permits. This means, for instance, that asylum seekers who have not yet obtained a residence permit are not included in our sample. Furthermore, the data do not allow us to identify the exact year of arrival
for immigrants who arrived in 1968 or earlier.
Hansen and
Lofstrom
81
Table 1 Mean Observable Characteristics by Immigrant Status and Welfare Receipt
Immigrants Natives
Nonrefugee Country Refugee Country
Nonwelfare Welfare
Nonwelfare Welfare
Nonwelfare Welfare
Total Recipient
Recipient Recipient
Recipient Recipient
Recipient Age
39.91 40.46
32.31 39.31
35.08 35.91
34.54 Years since migration
12.52 NA
NA 15.87
13.34 9.63
5.37 Education
Elementary school 32.40
31.34 43.54
36.29 47.31
38.61 45.97
High school 57.42
58.22 54.65
51.99 48.56
47.93 44.57
College 10.19
10.43 1.81
11.73 4.13
13.46 9.46
Single 53.34
51.98 89.47
51.74 80.04
41.79 55.67
Number of children 0.59
0.57 0.52
0.71 0.70
0.99 1.01
SA norm 5,961
5,979 4,859
6,137 5,341
6,742 6,353
Unemployment rate 6.04
6.01 6.40
6.04 6.22
6.24 6.81
Sample size 1,647,390
1,009,780 44,372
304,239 33,125
183,162 72,712
Source: Longitudinal Individual Data for Sweden LINDA, 1990–96.
82 The Journal of Human Resources
B. Variable Definition and Descriptive Statistics
