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Human Well-Being And In-Work Benefits: A Randomized Controlled Trial

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  • Dorsett, Richard

    (National Institute of Economic and Social Research)

  • Oswald, Andrew J

    (Department of Economics, University of Warwick)

Abstract

Many politicians believe they can intervene in the economy to improve people’s lives. But can they? In a social experiment carried out in the United Kingdom, extensive in-work support was randomly assigned among 16,000 disadvantaged people. We follow a sub-sample of 3,500 single parents for 5 ensuing years. The results reveal a remarkable, and troubling, finding. Long after eligibility had ceased, the treated individuals had substantially lower psychological wellbeing, worried more about money, and were increasingly prone to debt. Thus helping people apparently hurt them. We discuss a behavioral framework consistent with our findings and reflect on implications for policy Key words: JEL classification: I31 ; D03 ; D60 ; H11 ; J38

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Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 1038.

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Date of creation: 2014
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Handle: RePEc:wrk:warwec:1038

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  1. Human Well-being and In-Work Benefits: A Randomized Controlled Trial
    by maximorossi in NEP-LTV blog on 2014-03-11 13:40:25

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