Choosing To Become A ‘Lost Cause’:The Perverse Effects Of Benefit Preconditions
AbstractThis paper argues that preconditions for welfare benefit entitlements based on labour market prospects can be counterproductive when they create an incentive for individuals to abstain from any investment earlier in life that could improve future prospects. Benefit entitlements based partly on investments made prior to labour market entry are then Pareto-improving.
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Bibliographic InfoPaper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 886.
Length: 30 pages
Date of creation: 2003
Date of revision:
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Postal: Department of Economics, The University of Melbourne, 5th Floor, Economics and Commerce Building, Victoria, 3010, Australia
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Benefits; job search; irreversible investments;
Other versions of this item:
- Lisa Farrell & Paul Frijters, 2008. "Choosing to become a 'lost cause': the perverse effects of benefit preconditions," Oxford Economic Papers, Oxford University Press, vol. 60(1), pages 1-19, January.
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
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