In many advanced welfare states, welfare recipients often receive benefits for long periods. This persistence of welfare receipt can be caused by two distinct mechanisms: genuine or spurious state dependence. Knowledge of which of the two mechanisms drives the observed state dependence is...

Welfare recipients in Germany are allowed to take up supplementary jobs while receiving welfare. The possibility of having a supplementary job was introduced to reduce welfare dependency and facilitate successful labor market integration. In the present study, we use the German Panel Study...