Time Limits on Welfare Use under Involuntary Unemployment
AbstractThe impacts of introducing or tightening time limits on welfare use are studied in an efficiency wage model. Those losing access to regular benefits receive some smaller benefit, which can be interpreted as food stamps. Stricter time limits raise both employment and profits and generally reduce the tax rate. The impact on the net wage is ambiguous. Changes of utility levels of employed workers and recipients of regular social assistance have the same sign as the variation in the net wage. The utility differential between social assistance recipients and food stamp participants shrinks.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1220.
Date of creation: 2004
Date of revision:
welfare benefits; time limits; efficiency wages;
Find related papers by JEL classification:
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-04 (All new papers)
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