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Transitions from Welfare to Employment: Does the Ratio between Labor Income and Social Assistance Matter?

Author

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  • Hilmar Schneider
  • Arne Uhlendorff

Abstract

It is often argued that the high level of welfare claims in Germany creates little incentive for workers with low productivity to seek for a job. We examine the influence of the ratio between estimated potential labor income and the welfare payment level on the probability of leaving social welfare. We estimate a discrete time hazard rate model with unobserved heterogeneity using representative micro data from the German Socio-Economic Panel Study (SOEP). Our results show that the ratio has a positive effect on the probability of leaving social welfare. This effect is especially relevant for households with a potential labor income higher than their welfare payment level.

Suggested Citation

  • Hilmar Schneider & Arne Uhlendorff, 2005. "Transitions from Welfare to Employment: Does the Ratio between Labor Income and Social Assistance Matter?," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 125(1), pages 51-61.
    • Handle: RePEc:aeq:aeqsjb:v125_y2005_i1_q1_p51-61
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    Citations

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    Cited by:

    1. Martin Guzi, 2014. "An Empirical Analysis of Welfare Dependence in the Czech Republic," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 64(5), pages 407-431, November.
    2. Achatz, Juliane & Trappmann, Mark, 2011. "Arbeitsmarktvermittelte Abgänge aus der Grundsicherung : der Einfluss von personen- und haushaltsgebundenen Barrieren," IAB-Discussion Paper 201102, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Kerschbaumer Lukas, 2019. "Handlungsfähigkeit bei Langzeitarbeitslosigkeit: Woher nehmen?," Arbeit, De Gruyter, vol. 28(1), pages 73-94, March.
    4. Schneider Hilmar & Zimmermann Klaus F. & Uhlendorff Arne, 2013. "Ökonometrie vs. Projektdesign: Lehren aus der Evaluation eines Modellprojekts zur Umsetzung des Workfare-Konzepts," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(1), pages 65-85, February.
    5. World Bank, 2015. "The Impact of Targeted Social Assistance on Labor Market in Georgia," World Bank Publications - Reports 22502, The World Bank Group.
    6. Schneider, Hilmar & Uhlendorff, Arne & Zimmermann, Klaus F., 2010. "Mit Workfare aus der Sozialhilfe? Lehren aus einem Modellprojekt," IZA Standpunkte 33, Institute of Labor Economics (IZA).

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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