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Interactions in Public Policies: Spousal Responses and Program Spillovers of Welfare Reforms

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  • Julian Vedeler Johnsen
  • Kjell Vaage
  • Alexander Willén

Abstract

In this paper we exploit the introduction of an early retirement reform in Norway to provide new evidence on interactions in public policies across programs and household members. The analysis generates four results. First, the reform decreased the employment of the directly affected individuals. Second, the introduction of the early retirement option caused program substitution away from alternative welfare programs. Third, it reduced employment among spouses of directly affected individuals. Finally, the reduction in spousal employment was driven by take-up of disability insurance. These results demonstrate that interactions in public policies can have a substantial impact on the effect of welfare reforms.

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  • Julian Vedeler Johnsen & Kjell Vaage & Alexander Willén, 2022. "Interactions in Public Policies: Spousal Responses and Program Spillovers of Welfare Reforms," The Economic Journal, Royal Economic Society, vol. 132(642), pages 834-864.
    • Handle: RePEc:oup:econjl:v:132:y:2022:i:642:p:834-864.
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    1. Todd Morris & Benoit Dostie, 2023. "Graying and staying on the job: The welfare implications of employment protection for older workers," Cahiers de recherche / Working Papers 15, Institut sur la retraite et l'épargne / Retirement and Savings Institute.
    2. Pedro Carneiro & Kjell Salvanes & Barton Willage & Alexander Willén, 2023. "Childhood Shocks Across Ages and Human Capital Formation," Working Papers 2023-018, Human Capital and Economic Opportunity Working Group.
    3. Moghadam, Hamed Markazi & Puhani, Patrick & Tyrowicz, Joanna, 2023. "Pension Reforms and Couples' Labour Supply Decisions," Economics Working Paper Series 2304, University of St. Gallen, School of Economics and Political Science.
    4. Samuel Dodini & Kjell G. Salvanes & Alexander Willén & Li Zhu & Alexander L.P. Willén, 2023. "The Career Effects of Union Membership," CESifo Working Paper Series 10469, CESifo.
    5. Ejrnæs, Mette & García-Miralles, Esteban & Gørtz, Mette & Lundborg, Petter, 2023. "When Death Was Postponed: The Effect of HIV Medication on Work, Savings, and Marriage," IZA Discussion Papers 16228, Institute of Labor Economics (IZA).
    6. De Brouwer, Octave & Leduc, Elisabeth & Tojerow, Ilan, 2023. "The consequences of job search monitoring for the long-term unemployed: Disability instead of employment?," Journal of Public Economics, Elsevier, vol. 224(C).
    7. Cetin, Sefane & Jousten, Alain, 2022. "Retirement Decision of Belgian Couples and the Impact of the Social Security System," LIDAM Discussion Papers CORE 2022024, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Dodini, Samuel & Willén, Alexander & Zhu, Julia Li, 2023. "The Role of Labor Unions in Immigrant Integration," Discussion Paper Series in Economics 24/2023, Norwegian School of Economics, Department of Economics.
    9. Herman Kruse, 2021. "Joint Retirement in Couples: Evidence of Complementarity in Leisure," Scandinavian Journal of Economics, Wiley Blackwell, vol. 123(3), pages 995-1024, July.
    10. Kruse, Herman & Myhre, Andreas, 2021. "Early Retirement Provision for Elderly Displaced Workers," MPRA Paper 109431, University Library of Munich, Germany.
    11. Mike Brewer & Thang Dang & Emma Tominey, 2023. "Welfare reform: Employment, mental health and intrahousehold insurance," CEPEO Working Paper Series 23-06, UCL Centre for Education Policy and Equalising Opportunities.
    12. Willén, Alexander & Willage, Barton & Riise, Julie, 2022. "Employment Protection and Child Development," Discussion Paper Series in Economics 19/2022, Norwegian School of Economics, Department of Economics.
    13. Salvanes, Kjell G & Dodini, Samuel & Lovenheim, Michael F. & Willén, Alexander, 2020. "Monopsony, Skills, and Labor Market Concentration," CEPR Discussion Papers 15412, C.E.P.R. Discussion Papers.

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    More about this item

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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