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

Abstract 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.