Why Many Eligible Individuals Choose Not to Go on Welfare
AbstractThis article investigates why many eligible for welfare do not participate. We show that on-the-job wage-rising potential is the key factor motivating nonparticipation. Although individuals with very low earnings and little wage-rising potential are typically welfare recipients, those with good wage-rising potential may choose to work, participate in old age, or never participate. Nonparticipation remains the best choice for eligible individuals with large wage-rising potential even if universal old-age social security is available. We will also apply this model to a comprehensive welfare system in Hong Kong.(JEL H53, I38, J31) Copyright 2005, Oxford University Press.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 43 (2005)
Issue (Month): 2 (April)
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Find related papers by JEL classification:
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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