To what extent do disadvantaged neighbourhoods mediate social assistance dependency? Evidence from Sweden

Artikel i vetenskaplig tidskrift, 2025

This article investigates social assistance dependency and its relation to neighbourhood disadvantage in Sweden. We combine Swedish register data, tracking and analysing a cohort from 1998-2017, with the help of causal mediation, our analysis identifies the impact of early-adulthood social assistance on mid-adulthood social assistance. More specifically, we examine the mediating roles of neighbourhood conditions and compare this effect to the well-known mediating effect of unstable work experiences. Our findings suggest a differential effect for individuals with a high versus low probability of receiving social assistance in early adulthood. For individuals with a baseline high probability of receiving early-adulthood social assistance, the total estimated effect of early-adulthood social assistance on mid-adulthood social assistance recipiency is over 15 per cent points. Neighbourhood disadvantage only has a minor mediating effect on average, however, for individuals with a high risk of early-adulthood social assistance, the effect is substantial, over 5 per cent points, even more than the mediating effect from unstable work. The findings suggest that for high-risk individuals, social assistance recipiency in young adulthood is linked to subsequent entrenchment in disadvantaged areas and unstable employment, reinforcing a cycle of poverty. Our findings contribute to understanding the complex interactions between policy, socioeconomic status, and environmental factors in perpetuating social assistance dependency.