Tantalus curse? Multigenerational persistence of welfare dependency in Switzerland

We study welfare dependency in a multigenerational horizontal framework that exploits family links among siblings and cousins. Leveraging population-wide administrative data from Switzerland, we document how family resemblance in welfare receipt is distributed between the nuclear and the extended family. Individuals with a welfare-dependent sibling show about a 22-percentage-point higher probability of welfare receipt. Conditional on sibling receipt, having a welfare-dependent cousin is associated with a further increase of about 5 percentage points. Conditional analyses indicate that most predictive content is concentrated within the nuclear family while the cousin association remains economically meaningful given a baseline prevalence of about 4 percent. Sibling resemblance is stronger for welfare receipt than for income, while the additional predictive content of cousins is similar for both outcomes, implying that this heterogeneity is confined to the nuclear family.