Munich Personal RePEc Archive

Does reduced cash beneit worsen educational outcomes of refugee children?

Jakobsen, Kristian Thor and Kaarsen, Nicolai and Vasiljeva, Kristine (2016): Does reduced cash beneit worsen educational outcomes of refugee children?

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Abstract

In 2002 the Danish government reduced the size of cash transfers to new refugees. We exploit the reform to study the effect of lower transfers on educational outomces of refugee children. Surprisingly, the reduction in parental benefits has no negative effect on educational outcomes of the children, such as test scores, probability of completion of the 9th grade or probability of enrollment in upper-secondary education. Likewise, children of parents affected by the reform are not forced to earn more in youth. Refugee parents increase their labour supply and earn more to compensate for the loss in income, but on average the increase in earnings does not compensate for the decline in benefits.

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