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Sanctions for Young Welfare Recipients

Author

Listed:
  • van den Berg, Gerard J.

    () (University of Bristol)

  • 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, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7630
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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.

    More about this item

    Keywords

    unemployment benefits; duration models; youth unemployment; welfare; monitoring; social assistance;

    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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