Dynamic effects of mandatory activation of welfare participants
AbstractPrevious literature shows that activation requirements for welfare participants decrease welfare participation. However, the dynamics have not been examined, and often only exit effects are analyzed. In this paper, we look more closely at the transition rates into and out of welfare. Using register data on the entire population of Stockholm, we are able to capture how both entry and exit rates were affected when activation require-ments were introduced at different times in Stockholm’s city districts. The results indi-cate that the main reduction in welfare participation is due to a small increase in exit rates. The part of the population that is at risk of entering into welfare, though, expe-riences a reduction in entry rates due to the reform. There are also heterogeneous ef¬fects, namely, large effects on entry rates for young individuals. In addition, there are larger effects on exit rates for unmarried individuals without children compared to the population as a whole.
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Bibliographic InfoPaper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2010:6.
Length: 39 pages
Date of creation: 31 May 2010
Date of revision:
Welfare reform; mandatory activation program; welfare entry; welfare exit;
Find related papers by JEL classification:
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-11 (All new papers)
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