Academic research in the past has shown that the children of families on welfare are more likely to grow up to be on welfare themselves.
But it isn’t just poverty and poor health that are causing this.
A new NBER study by Gordon Dahl of UCSD, Andreas Kostol of the University of Bergen, and Magne Mogstad finds that a parent on welfare creates a culture within the family that makes their adult children more likely to accept welfare.
The study looks at data from Norway’s “disability insurance” (DI) system and finds that when a parent is allowed DI, their adult child’s likelihood of participation over the next five years increases by 6%, and grows to 12% after 10 years.
According to the paper, this likely happens because “parents on welfare can provide information about the program to their children, reduce the stigma of participation, or invest differentially in child development.” It finds that parents being on welfare is a cause for the child being on welfare, not just a correlated factor.
As a contrast, they find that children of parents who have been denied welfare have only a 1% probability of being on welfare as adults.
The researcher also found that when parents are on welfare, the probability of the child working or getting a college degree falls. Specifically, when a parent is on welfare, the child is 7.7% less likely to be employed full-time, and 8% less likely to get a college degree. Overall, they are 13% less likely to be employed at all.
Read the whole paper at NBER.org.