Non-take-up of social assistance during the covid19- pandemic: a natural experiment of the tightening of access to social assistance in Switzerland

This study examines the impact of the 2019 reform of Switzerland's foreigners and integration act on hidden poverty among foreigners. The reform, which linked the extension of residence permits to independence of social assistance, intensified the intersection of welfare and migration policies. Using a difference-in-differences (DiD) approach, the research evaluates how the reform affected the non-take-up of social assistance among foreigners living in Switzerland. Utilizing linked tax, population, and social assistance data from Basel-City (2016-2020), the study identifies a slight decrease in non-take-up rates until 2018, followed by a modest increase in 2019 and a notable rise in 2020. Despite a decline in social assistance rates in 2020, hidden poverty increased, partly due to COVID-19 restrictions. The DiD analysis shows a significant rise in non-take- up with a 7.1 percentage point increase from 2018 to 2020 among third-country foreigners with a settlement permit (C) suggesting that the reform forced some groups into hidden poverty. These findings highlight the complex interplay between welfare state design and migration policies and questions the legitimacy of non-equitable access to social safety nets.