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Young people’s risk of becoming social assistance claimants:

Young people’s risk of becoming social assistance claimants:. Social class or New Social Risks? Thomas Lorentzen, Espen Dahl og Ivan Harsløf. Background. Research on social assistance dynamics has focused on the process of exiting social assistance. Social assistance duration

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Young people’s risk of becoming social assistance claimants:

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  1. Young people’s risk of becoming social assistance claimants: Social class or New Social Risks? Thomas Lorentzen, Espen Dahl og Ivan Harsløf

  2. Background • Research on social assistance dynamics has focused on the process of exiting social assistance. • Social assistance duration • Transitions from social assistance • ALMP evaluations • Little knowledge of the process leading to social assistance entry. • What triggers social assistance receipt: • Stable socioeconomic characteristics • Unexpected life-course events

  3. Objective • Shed light on the process leading to first-time social assistance receipt. • Data requirements: • A group of “fresh” non-recipients • Still to experience critical life course events • Longitudinal data • Starting point: • The whole cohort of 18-year-olds in 1993, subtracted those with own families.

  4. Theoretical framework • Social class • Parental characteristics • Highest education • Family income • New Social Risks and trigger events • Family formation, family breakdown, unemployment, sickness etc. • Unpredictable - distributed democratically • Everyone at risk • Have concepts of social class lost their explanatory power?

  5. Hypotheses • Social class influences the risk of claiming social assistance directly. • Social class influence the risk of claiming social assistance indirectly, as the risk of experiencing NSR is higher among persons from lower social class background. • NSR influence the risk of claiming social assistance independently of social class. • NSR and social class interact, as lower class background increase the negative effect from NSR and trigger events.

  6. Data • Register-based longitudinal data. • Covers the entire Norwegian population. • Individual is the statistical unit. • Contains key variable for identification of family members. • Longitudinal variables covering labour market events, education, social security benefits, and social assistance. • 1993-cohort of 18-year olds without own families • Follow-up period from age 18 (1993) to 30 (2004) • 56 953 persons at risk for first-time receipt of social assistance.

  7. Methodology • Event history analysis: • Multivariate discrete-time proportional hazards model. • Includes both constant and time-varying variables. • Full non-parametric specifications for duration dependence.

  8. Analytical model • Dependent variable: • First-time entry into social assistance • Independent variable blocks: • Annual dummies • Demography • Social class • Labour market • NSR and trigger events • Interaction NSR/trigger events and social class

  9. Results: Age and time related social assistance risk

  10. Time/age and social assistance risk • Increasing social assistance risk until age 19 (1994). • Maximum risk of 7 percent at age 19. • Less than 0.5 percent risk when 30. • Sharp decrease from age 19 to 23. • The risk of becoming a first-time recipient is extremely low having made it to 25 (2000) without social assistance.

  11. Results: Demography

  12. Gender and social assistance risk • All analyses were initially run separately for men and women. • Only minor gender differences were found

  13. Education and social assistance risk • Education is one of the most decisive factors for first-time receipt. • At age 19: • More than 19 percent of youth finishing lower education experience a transition to social assistance. • Corresponding to 3 percent among youth going through higher education • The differences in education-related risks are virtually non-existent after age 24.

  14. Ethnicity and social assistance risk • Non-Western immigrants have a far higher social assistance risk than others • More than 16 percent of this group receive social assistance for the first time at age 19. • Corresponding to approximately 6 percent among those born in Norway by Norwegian parents. • The difference between ethnic groups is almost gone at age 25.

  15. Results: Social class

  16. Highest family education and social assistance risk • Parents education as important as own education for lower educational levels. • At age 19: • 14 percent risk of becoming first-time recipient if parents have lower education. • The comparable risk among children whose parents have higher education is approximately 3 percent.

  17. Family income and social assistance risk • Parents’ total income is divided into quartiles. • Parental income is decisive for individual social assistance risk. • Gradient between 1. quartile and the three next. • Parental income loses most of its importance after age 24 (1999).

  18. Results: Labour market characteristics

  19. Municipal unemployment and social assistance risk • Municipal unemployment divided into quartile groups. • Municipal unemployment level is important for the risk of entering social assistance. • At age 19: • Residents in high-unemployment municipalities have more than 7 percent risk of social assistance, while • residents in low-unemployment municipalities have a 4 percent risk of social assistance. • The effect of unemployment level is substantial until 2000.

  20. Results: New Social Risks and trigger events

  21. Childbearing and social assistance risk • The joint effect of having one child is negative compared to no children or more than one child (ref. paper). • This obscures the fact that the effect of childbearing varies with the age of first birth. • Until age 26, all childbearing seems to increase the risk of first-time social assistance receipt.

  22. Moving and social assistance risk • We only have information of persons moving between municipalities. • Unable to identify moving within the municipality. • For the 1975-cohort moving out of the municipality is often synonymous with moving away from home. • At 18: • Moving increase the risk of social assistance threefold. • 5 vs. 15 percent. • The risk is pronounced until the age of 26 (2001).

  23. Exit from school and social assistance risk • The transition from school to work increase the risk of social assistance receipt. • However, the effect of leaving school tapers off in the period between 1993 and 1999. • In 1999 the heightened risk of exiting school is almost gone. • This might be a result of length of education.

  24. Individual unemployment and social assistance risk • The risk of receiving social assistance is more than 13 percent if unemployed at 19. • The comparable number for those not registered as unemployed is approximately 6 percent. • The difference is substantial throughout the whole observation period.

  25. Results: Interaction effects

  26. Family education, unemployment and social assistance risk • Experiencing unemployment has more severe consequences for young people raised in families with lower education. • At age 19: • persons whose parents have lower education have twice the risk of those coming from families with higher education • The risk is even more pronounced at age 18. • Seen in the context of social class and NSR: • The consequence of negative trigger events is more severe for persons coming from lower class backgrounds.

  27. Family income, childbearing and social assistance risk • Family income is important for the risk of receiving social assistance after giving birth to one’s first child. • At 18: • The risk of receiving social assistance is approximately 15 percent for individuals coming from the fourth income quartile, • while it is 30 for those coming from the first quartile. • The interaction effect is substantial until the age of 24 (1999).

  28. Family income, unemployment and social assistance risk • Parents’ ability to give financial support is important during unemployment spells. • Young people from families with low income have a substantially higher risk of receiving social assistance than their equals from families with higher incomes. • At age 18, the difference is 6 versus 15 percent. • The interaction effect is visible until the age of 27 (2002).

  29. Conclusions (1) • The period from 18 to 25 is critical • The risk of becoming a first-time recipient of social assistance is negligible after 25. • Supports the idea of critical life-phases. • Possible to identify potential social assistance dependency at an early stage.

  30. Conclusions (2) • Social class has a direct effect on social assistance risk. • Social class has an indirect effect: • The class effect tapers off slightly after the introduction of NSR and trigger variables • NSR and trigger events influence the risk of claiming social assistance independently of social class. • NSR and social class interact • Individuals from lower class backgrounds experience more severe consequences from NSR/trigger events than individuals from higher class backgrounds.

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