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Transfers, Segregation, and Local Labour Markets: Evidence from Three Decades of Declining Transfers

Nordin, Martin LU (2026) In Lund Papers in Economic Demography
Abstract
Using Swedish register data for 1993–2022, this paper documents robust spatial heterogeneity
in the relationship between transfer generosity and local employment. Transfer reductions are
associated with lower employment among individuals far from the labour market in immigrant-
dense neighbourhoods, but with higher employment among individuals with stronger labour-
market attachment. This pattern is difficult to explain with a purely labour-supply interpretation
and is consistent with local-demand channels playing an important role in economically weaker
neighbourhoods. An illustrative cost calculation suggests that the implied employment cost in
the most immigrant-dense areas is of a plausible order of... (More)
Using Swedish register data for 1993–2022, this paper documents robust spatial heterogeneity
in the relationship between transfer generosity and local employment. Transfer reductions are
associated with lower employment among individuals far from the labour market in immigrant-
dense neighbourhoods, but with higher employment among individuals with stronger labour-
market attachment. This pattern is difficult to explain with a purely labour-supply interpretation
and is consistent with local-demand channels playing an important role in economically weaker
neighbourhoods. An illustrative cost calculation suggests that the implied employment cost in
the most immigrant-dense areas is of a plausible order of magnitude and comparable to
estimates from the local fiscal multiplier literature. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working paper/Preprint
publication status
published
subject
in
Lund Papers in Economic Demography
issue
2026:3
pages
30 pages
language
English
LU publication?
yes
id
4f3749f2-d831-427a-a36b-eb2fc2dfe85d
alternative location
https://www.lusem.lu.se/sites/lusem.lu.se/files/2026-05/LPED%202026%203.pdf
date added to LUP
2026-05-20 14:43:29
date last changed
2026-05-20 14:43:29
@misc{4f3749f2-d831-427a-a36b-eb2fc2dfe85d,
  abstract     = {{Using Swedish register data for 1993–2022, this paper documents robust spatial heterogeneity<br/>in the relationship between transfer generosity and local employment. Transfer reductions are<br/>associated with lower employment among individuals far from the labour market in immigrant-<br/>dense neighbourhoods, but with higher employment among individuals with stronger labour-<br/>market attachment. This pattern is difficult to explain with a purely labour-supply interpretation<br/>and is consistent with local-demand channels playing an important role in economically weaker<br/>neighbourhoods. An illustrative cost calculation suggests that the implied employment cost in<br/>the most immigrant-dense areas is of a plausible order of magnitude and comparable to<br/>estimates from the local fiscal multiplier literature.}},
  author       = {{Nordin, Martin}},
  language     = {{eng}},
  note         = {{Working Paper}},
  number       = {{2026:3}},
  series       = {{Lund Papers in Economic Demography}},
  title        = {{Transfers, Segregation, and Local Labour Markets: Evidence from Three Decades of Declining Transfers}},
  url          = {{https://www.lusem.lu.se/sites/lusem.lu.se/files/2026-05/LPED%202026%203.pdf}},
  year         = {{2026}},
}