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Sanctions for Young Welfare Recipients

Author

Listed:
  • van den Berg, Gerard J.

    (University of Groningen)

  • Uhlendorff, Arne

    (CREST)

  • Wolff, Joachim

    (Institute for Employment Research (IAB), Nuremberg)

Abstract

Social welfare systems usually imply specific obligations for benefit recipients. If a recipient does not comply with these obligations, a sanction involving a punitive benefits reduction may be imposed. In this paper we give an overview of the literature on the effects of sanctions in social welfare systems and we present first results on the effects of sanctions for young unemployed welfare recipients based on German administrative data. The German welfare system is particularly strict for young individuals. We distinguish between mild and strong sanctions and we focus on the impact of these sanctions on job finding probabilities. Our results suggest that each type of sanction leads to an increased transition rate to work, and that this effect is higher for strong sanctions. However, strong sanctions for young welfare recipients involve a complete withdrawal of the basic cash transfer payments, and there exists evidence that these severe sanctions might go along with additional, negative effects for sanctioned individuals.

Suggested Citation

  • van den Berg, Gerard J. & Uhlendorff, Arne & Wolff, Joachim, 2013. "Sanctions for Young Welfare Recipients," IZA Discussion Papers 7630, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp7630
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    References listed on IDEAS

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    1. Jaap H. Abbring & Gerard J. Berg & Jan C. Ours, 2005. "The Effect of Unemployment Insurance Sanctions on the Transition Rate from Unemployment to Employment," Economic Journal, Royal Economic Society, vol. 115(505), pages 602-630, July.
    2. Rafael Lalive & Jan C. van Ours & Josef Zweimüller, 2005. "The Effect Of Benefit Sanctions On The Duration Of Unemployment," Journal of the European Economic Association, MIT Press, vol. 3(6), pages 1386-1417, December.
    3. Gaure, Simen & Roed, Knut & Zhang, Tao, 2007. "Time and causality: A Monte Carlo assessment of the timing-of-events approach," Journal of Econometrics, Elsevier, vol. 141(2), pages 1159-1195, December.
    4. Wolff, Joachim & Nivorozhkin, Anton, 2012. "Give them a break! Did activation of young welfare recipients overshoot in Germany? (A regression discontinuity analysis)," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62046, Verein für Socialpolitik / German Economic Association.
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    Cited by:

    1. Lombardi, Stefano, 2019. "Threat effects of monitoring and unemployment insurance sanctions: evidence from two reforms," Working Paper Series 2019:22, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Pipinis, Dimitris & Taylor, Sarah & Tuffin, Andrew & Ross, Colin & Tse, Max, 2016. "Benefit Sanctions: Detailed Methodology," MPRA Paper 80012, University Library of Munich, Germany.

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    More about this item

    Keywords

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    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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