Transitions from Welfare to Employment: Does the Ratio between Labor Income and Social Assistance Matter?
AbstractIt 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.
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Bibliographic InfoArticle provided by Duncker & Humblot, Berlin in its journal Schmollers Jahrbuch.
Volume (Year): 125 (2005)
Issue (Month): 1 ()
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Web page: http://www.duncker-humblot.de
Find related papers by 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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- Martin Guzi, 2013.
"An Empirical Analysis of Welfare Dependence in the Czech Republic,"
16, Central European Labour Studies Institute (CELSI).
- Guzi, Martin, 2013. "An Empirical Analysis of Welfare Dependence in the Czech Republic," IZA Discussion Papers 7478, Institute for the Study of Labor (IZA).
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- 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].
- Schneider, Hilmar & Uhlendorff, Arne & Zimmermann, Klaus F., 2010. "Mit Workfare aus der Sozialhilfe? Lehren aus einem Modellprojekt," IZA Standpunkte 33, Institute for the Study of Labor (IZA).
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