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Work Requirements and Long Term Poverty

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  • Schroyen, F.
  • Torsvik, G.

Abstract

We evaluate the costs of three different programs for alleviating long term poverty: (i) workfare, or grants made contingent on a work requirement, (ii) universal welfare, or unconditional grants, and (iii) meanstested welfare, or grants conditioned on private labor market earnings. We identify the conditions under which each of these programs are cost efficient and compare them with the corresponding conditions for short term poverty alleviation. We find that the arguments for using work requirements are both strenghtened and weakened with long term poverty. We also find that as the fraction of really needy persons increases, it may be optimal to give up any attempt to screen the genuine poor from the spurious cases, even when screening is made easier by the possibility to observe earnings. (It is never optimal to refrain from screening when poverty is of short term).

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Bibliographic Info

Paper provided by Norwegian School of Economics and Business Administration- in its series Papers with number 9/99.

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Length: 32 pages
Date of creation: 1999
Date of revision:
Handle: RePEc:fth:norgee:9/99

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Postal: NORWEGIAN SCHOOL OF ECONOMICS AND BUSINESS ADMINISTRATION, HELLEVEIEN 30, 5035 BERGEN SANDVIKEN NORWAY.
Phone: 5595 9000
Fax: 5595 9100
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Web page: http://www.nhh.no/
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Keywords: POVERTY ; SOCIAL WELFARE ; LABOUR;

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Cited by:
  1. Tim Lohse, 2014. "The Objections against Workfare Revised," Review of Economics, Lucius & Lucius, vol. 65(1), pages 95-118.

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