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The University of Southampton
EconomicsPart of Economic, Social and Political Science

1901 The impact of labour market discrimination on welfare dependency of second generation immigrants in the UK

Author: Armine Ghazaryan

Paper Number: 1901 


Many studies show that immigrants tend to claim more benefits than natives, even when accounting for their individual characteristics. This paper suggests and tests the hypothesis that the tendency of immigrants to claim more benefits is linked to income discrimination in the labour market.

This study uses panel data from Understanding Society, a UK household longitudinal survey, to look at second generation immigrants in comparison to UK natives. By estimating labour market discrimination against immigrants using available methodology on income decomposition, the paper then uses the estimates of discrimination to study whether labour market discrimination affects welfare dependency of immigrants.

This paper shows that immigrants' likelihood to move into state welfare dependency increases when there is discrimination in the labour market. The results differ for EU versus non-EU second generation immigrants.

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