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On mandatory activation of welfare receivers

Author

Listed:
  • Dahlberg, Matz

    (Department of Economics)

  • Johansson, Kajsa

    (Department of Economics)

  • Mörk, Eva

    (IFAU)

Abstract

This paper investigates whether mandatory activation programs for welfare receivers have effects on welfare participation, employment and disposable income. In contrast to earlier studies we are able to capture both entry and exit effects. The empirical analysis makes use of a Swedish welfare reform in which the city districts in Stockholm gradually implemented mandatory activation programs for individuals on welfare. The reform is well suited for investigating effects of such programs for several reasons. First, the reform was not combined with any other policy instruments, like time limits or tax credits, making sure that we will capture effects of mandatory activation policies and nothing else. Second, the reform was initiated at different points of time in different city districts, which ease identification. Third, using data from city districts within a single local labor market we can control for confounding macro economic shocks. Overall, we find that mandatory activation of welfare receivers reduce overall welfare participation and increases employment. We also find that mandatory activation programs appear to work best for young people and for people born in non-Western countries. For disposable income, we do not find a statistically significant effect.

Suggested Citation

  • Dahlberg, Matz & Johansson, Kajsa & Mörk, Eva, 2008. "On mandatory activation of welfare receivers," Working Paper Series 2008:13, Uppsala University, Department of Economics.
  • Handle: RePEc:hhs:uunewp:2008_013
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    References listed on IDEAS

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    1. Bruce D. Meyer & James X. Sullivan, 2003. "Measuring the Well-Being of the Poor Using Income and Consumption," NBER Working Papers 9760, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Gustafsson, Björn Anders, 2011. "Disparities in Social Assistance Receipt between Immigrants and Natives in Sweden," IZA Discussion Papers 6129, Institute of Labor Economics (IZA).
    2. Tuomala, Juha & Hämäläinen, Kari & Hämäläinen, Ulla, 2014. "The labour market impacts of a youth guarantee: lessons for Europe?," Working Papers 60, VATT Institute for Economic Research.
    3. Persson, Anna & Vikman, Ulrika, 2010. "Dynamic effects of mandatory activation of welfare participants," Working Paper Series, Center for Labor Studies 2010:11, Uppsala University, Department of Economics.

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    More about this item

    Keywords

    Welfare reform; Mandatory activation programs; Welfare participation; Employment; Difference-in-differences;
    All these keywords.

    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

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