Welfare reform and migrant's long-term labor market integration

Abstract

We study the effect of welfare assistance on migrant integration in Australia. The government implemented a policy reducing welfare support for migrants, particularly mothers with children, during their first two years in the country, which was announced after arrival. Using a regression discontinuity design and administrative welfare data spanning 21 years, we find that this reform significantly decreased welfare receipt over the long term, widened over time, and stabilized in the long run. Benefits were reduced by 28%, and time on benefits by 19%, particularly in unemployment and disability categories. We observe larger treatment effects for mothers from disadvantaged backgrounds. Show more