Structural state dependence in Swedish social assistance during the 1990s economic crisis

We examine structural state dependence in social assistance in Sweden using register-based panel data from the 1990s, a period of severe economic stress, and document heterogeneity by partnership composition and migration background, with implications for contemporary integration policy and household economic mobility. Tracking a cohort of individuals who were single in 1990 and estimating dynamic discrete-choice models with unobserved heterogeneity and initial conditions, we find substantial persistence that varies systematically by gender, country of birth and partnership composition. A novel finding is that structural state dependence is highest among Swedish-born single individuals, particularly men. For both Swedish-born and foreign-born men, partnering with a Swedish-born woman is associated with lower structural state dependence, whereas partnering with a foreign-born woman is associated with higher structural state dependence only among foreign-born men. Because eligibility is assessed at the household level, these patterns should be interpreted as reduced-form persistence in household-level receipt that may combine behavioural state dependence with mechanical eligibility changes triggered by partnership formation and reassessment of joint resources.