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Distributional Effects of Welfare Reform for Young Adults: An Unconditional Quantile Regression Approach

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  • Hernaes, Øystein

    (Ragnar Frisch Centre for Economic Research)

Abstract

The paper evaluates the distributional effects on earnings and income of requiring young welfare recipients to fulfill conditions related to work and activation. It exploits within-social insurance office variation in policy arising from a geographically staggered reform in Norway. The reform reduced welfare uptake and for women had large, positive effects in the lower part of the earnings distribution. The effect on the distribution of total income is also positive, thus gains in earnings more than offset reduced welfare benefits. Fewer welfare payments and smaller caseloads make the policy highly cost-effective.

Suggested Citation

  • Hernaes, Øystein, 2018. "Distributional Effects of Welfare Reform for Young Adults: An Unconditional Quantile Regression Approach," IZA Discussion Papers 11340, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11340
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    3. Eréndira León Bravo, 2022. "Three essays on education, wages, and the labour market in Mexico," Economics PhD Theses 0322, Department of Economics, University of Sussex Business School.

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    More about this item

    Keywords

    social assistance; activation; conditionality; welfare reform; labor supply; quantile treatment effects;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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