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Economic Effects of Workfare Reforms for Single Mothers: Benefit Substitution and Labour Supply Responses

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  • Julian Vedeler Johnsen
  • Katrine Holm Reiso

Abstract

We analyse the economic effects of nationwide Norwegian reforms on the state benefit programme targeting single mothers. Our results show that for each reduction of 100 Norwegian kroner (NOK) in benefit payments from the programme, single mothers replaced 65 NOK through benefit substitution. Their labour supply and disposable income also increased in the short term. However, the reforms doubled the poverty rate among single mothers in the long term. The reforms led to a total net gain to public expenditure of 3.6 billion NOK (449 million euros) during the 1998–2008 period, corresponding to a 14 percent decrease in total benefit payments to single mothers.

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  • Julian Vedeler Johnsen & Katrine Holm Reiso, 2020. "Economic Effects of Workfare Reforms for Single Mothers: Benefit Substitution and Labour Supply Responses," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(2), pages 494-523, April.
    • Handle: RePEc:bla:scandj:v:122:y:2020:i:2:p:494-523
    DOI: 10.1111/sjoe.12352
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    References listed on IDEAS

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    1. Li, Liming & Avendano, Mauricio, 2023. "Lone parents' employment policy and adolescents’ socioemotional development: Quasi-experimental evidence from a UK reform," Social Science & Medicine, Elsevier, vol. 320(C).

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