The Effects of Social Assistance and Unemployment Insurance on Employment Outcomes : Evidence from new micro level administrative data at Statistics Sweden between 2019-2023

Sammanfattning: In this study, I examine the employment effects on average earnings and duration to work during a 45 month period, after receiving social assistance (SA) in October 2019, compared to receiving unemployment insurance (UI) the same month. A distinction is made between two treatment groups; receiving SA in addition to UI (treatment I) and receiving SA (treatment II). Using propensity score matching (PSM), I estimate the average treatment effects on the treated on earnings, as well as duration to work by using the Kaplan-Meier survival estimator with the matched observations. I use newly released Swedish administrative micro level data of individuals’ monthly labour market status (BAS) between 2020-2023, from Statistics Sweden. During this thesis process, where Statistics Sweden allowed me data access, I was allowed an additional year of data, for 2019. Results showed that the inflow of SA recipients in October 2019, on average had 25.5 percent lower earnings between November 2019-July 2023, compared to the inflow of UI recipients the same month. In addition, the inflow of SA recipients in October 2019, on average spent 4 months longer in unemployment, compared to those receiving UI the same month. However, results were insignificant when comparing effects between the inflow of those receiving SA in addition to UI in October 2019 with the inflow of UI recipients the same month. Results for this group were insignificant for both employment outcomes; average earnings and duration to work.