To What Extent Do Disadvantaged Neighborhoods Mediate Social Assistance Dependency? Evidence from Sweden

TL;DR

This study investigates how accumulated social assistance and neighborhood disadvantage influence dependency, revealing that long-term assistance greatly increases future dependency, with neighborhood effects being weak to moderate, using detailed Swedish longitudinal data.

Contribution

It provides causal-mediation analysis quantifying the impact of disadvantaged neighborhoods on social assistance dependency over a 17-year period in Sweden.

Findings

Accumulation of social assistance increases future dependency fourfold.

Disadvantaged neighborhoods have a weak to moderate mediating effect.

Long-term social assistance is a strong predictor of future dependency.

Abstract

Occasional social assistance prevents individuals from a range of social ills, particularly unemployment and poverty. It remains unclear, however, how and to what extent continued reliance on social assistance leads to individuals becoming trapped in social assistance dependency. In this paper, we build on the theory of cumulative disadvantage and examine whether the accumulated use of social assistance over the life course is associated with an increased risk of future social assistance recipiency. We also analyze the extent to which living in disadvantaged neighborhoods constitutes an important mechanism in the explanation of this association. Our analyses use Swedish population registers for the full population of individuals born in 1981, and these individuals are followed for approximately 17 years. While most studies are limited by a lack of granular, life-history data, our granular individual-level data allow us to apply causal-mediation analysis, and thereby quantify the extent to which the likelihood of ending up in social assistance dependency is affected by residing in disadvantaged neighborhoods. Our findings show the accumulation of social assistance over the studied period is associated with a more than four-fold increase on a risk ratio scale for future social assistance recipiency, compared to never having received social assistance during the period examined. Then, we examine how social assistance dependency is mediated by prolonged exposure to disadvantaged neighborhoods. Our results suggest that the indirect effect of disadvantaged neighborhoods is weak to moderate. Therefore, social assistance dependency may be a multilevel process. Future research is to explore how the mediating effects of disadvantaged neighborhoods vary in different contexts.