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The Employment Effects of Generous and Unconditional Cash Support

Author

Listed:
  • Verlaat, Timo

    (Utrecht School of Economics)

  • Todeschini, Federico

    (Pompeu Fabra University)

  • Ramos, Xavier

    (Universitat Autònoma de Barcelona)

Abstract

While unconditional cash transfers have been studied extensively in developing countries, little is known about their effects in a wealthier context. Through a randomized controlled trial, we study the employment effects of a generous and unconditional transfer targeting low-income families in Spain. Two years into the program, subjects assigned to treatment are 20 percent less likely to work than subjects assigned to a control group. Assignment to an activation plan does not attenuate adverse effects; a more lenient transfer withdrawal rate does. It appears that effects are driven by subjects with children, suggesting substitution of labour for care tasks.

Suggested Citation

  • Verlaat, Timo & Todeschini, Federico & Ramos, Xavier, 2023. "The Employment Effects of Generous and Unconditional Cash Support," IZA Discussion Papers 15976, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15976
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    More about this item

    Keywords

    welfare reform; cash transfer; basic income; policy evaluation; RCT;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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