Spillovers in welfare dependency within the family

Summary

Households are becoming increasingly reliant on welfare benefits to cover daily living expenses. Given that welfare dependence seems highly persistent across generations, this trend may not only pose a challenge for current generations but may also affect future generations’ welfare dependence, with dramatic consequences for social inequalities. However, little is known about the extent to which growing up in a family that is reliant on welfare causes someone to be welfare dependent himself later in life. This is the subject of this project.

The proposed research will further understanding of causal intergenerational relationships in welfare receipt by exploiting various quasi-natural experiments combined with ‘big data’. Part 1 investigates the extent to which welfare receipt in childhood has long term effects on socio-economic and health outcomes in adulthood, including reliance on welfare. Part 2 studies two critical mechanisms through which welfare dependency may be transmitted from one generation to the next, and investigates how dependency evolves over multiple generations. Part 3 extends the focus to the entire life cycle, identifying whether there exist critical phases over the life cycle where the impact of parental welfare dependency on next generations’ outcomes is largest.

The findings of this research can help improve the design of welfare policy by indicating whether, when, and how public policies should target children in welfare receiving families. My previous research has shown that welfare programs not only affect the population they target, but also others that are not targeted. A detailed investigation of impacts on untargeted future generations extends this line of research.

Details

Project number

452-17-007

Main applicant

Dr. A.C. Gielen

Affiliated with

Erasmus Universiteit Rotterdam, Erasmus School of Economics

Team members

M. Bastiaans, Dr. A.C. Gielen, Dr. G. Moroni, Dr. G. Moroni

Duration

01/04/2018 to 01/09/2022