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Social Employment of Welfare Recipients in Belgium: An Evaluation

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  • Geert Ridder
  • Bart Cockx

Abstract

In Belgium welfare agencies receive a subsidy to employ welfare recipients for a period sufficiently long to entitle them to benefits of the contributory social insurance program This work experience program without any training content is called Social Employment (SE) This paper investigates the effect of SE on the exit rate from welfare We argue that the funding of the program induces exogenous variation in the SE-participation rates between regions We propose a grouping/IV estimator of the SE effect that exploits this variation The estimator is consistent even if the selection into SE depends on the average unobserved characteristics of welfare recipients in a region and with the welfare spell of a specific length The empirical analysis shows that there is creaming in the selaction process Without correction for selectivity we find that SE reduces welfare dependency After correction this conclusion is reversed These results are in line with the diagnosis of the causes of unemployment persistence in Belgium and with the incentives faced by the welfare agencies that administer the program

Suggested Citation

  • Geert Ridder & Bart Cockx, 1999. "Social Employment of Welfare Recipients in Belgium: An Evaluation," Economics Working Paper Archive 415, The Johns Hopkins University,Department of Economics.
  • Handle: RePEc:jhu:papers:415
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    Cited by:

    1. Bergemann, Annette & Pohlan, Laura & Uhlendorff, Arne, 2017. "The impact of participation in job creation schemes in turbulent times," Labour Economics, Elsevier, vol. 47(C), pages 182-201.
    2. Betcherman, Gordon & Olivas, Karina & Dar, Amit, 2004. "Impacts of active labor market programs : new evidence from evaluations with particular attention to developing and transition countries," Social Protection Discussion Papers and Notes 29142, The World Bank.
    3. Cockx, Bart & Bardoulat, Isabelle, 1999. "Vocational Training: Does it speed up the Transition Rate out of Unemployment ?," LIDAM Discussion Papers IRES 1999032, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Cockx, Bart & Dejemeppe, Muriel, 2010. "The Threat of Monitoring Job Search: A Discontinuity Design," IZA Discussion Papers 5337, Institute of Labor Economics (IZA).
    5. Muriel Dejemeppe, 2005. "A Complete Decomposition of Unemployment Dynamics using Longitudinal Grouped Duration Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 67(1), pages 47-70, February.
    6. Eichler, Martin & Lechner, Michael, 2002. "An evaluation of public employment programmes in the East German State of Sachsen-Anhalt," Labour Economics, Elsevier, vol. 9(2), pages 143-186, April.
    7. Michael White and Genevieve Knight, 2003. "Benchmarking the effectiveness of NDYP: A review of European and US literature on the microeconomic effects of labour market programmes for young people," PSI Research Discussion Series 10, Policy Studies Institute, UK.
    8. Pohlan, Laura & Bergemann, Annette & Uhlendorff, Arne, 2016. "Job Creation Schemes in Turbulent Times," VfS Annual Conference 2016 (Augsburg): Demographic Change 145495, Verein für Socialpolitik / German Economic Association.
    9. Gerard J. van den Berg & Bas van der Klaauw & Jan C. van Ours, 2004. "Punitive Sanctions and the Transition Rate from Welfare to Work," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 211-241, January.
    10. Bart Cockx & Muriel Dejemeppe, 2005. "Duration dependence in the exit rate out of unemployment in Belgium. Is it true or spurious?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(1), pages 1-23, January.
    11. Bart Cockx & Christian Goebel & Stéphane Robin, 2013. "Can income support for part-time workers serve as a stepping-stone to regular jobs? An application to young long-term unemployed women," Empirical Economics, Springer, vol. 44(1), pages 189-229, February.
    12. Bart COCKX, 2000. "The design of active labour market policies: Building in effective incentives," International Labour Review, International Labour Organization, vol. 139(4), pages 457-480, December.
    13. Muriel Dejemeppe & Bruno Van der Linden & Andrey Launov & Bart Cockx, 2011. "Monitoring and Sanctions in a Non-Stationary Structural Job-Search Model," 2011 Meeting Papers 501, Society for Economic Dynamics.
    14. van den Berg, G. & van der Klaauw, B. & van Ours, J.C., 1998. "Punitive sanctions and the transition from welfare to work," Other publications TiSEM cfce4d32-1348-4f9a-ab86-e, Tilburg University, School of Economics and Management.
    15. Sam Desiere & Bart Cockx, 2021. "How effective are hiring subsidies to reduce long-term unemployment among prime-aged jobseekers? Evidence from Belgium," LIDAM Discussion Papers IRES 2021024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    16. Cockx, Bart, 1999. "The Design of Active Labour Market Policies. What Matters and What Doesn't ?," LIDAM Discussion Papers IRES 1999035, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    17. Desiere, Sam & Cockx, Bart, 2021. "How effective are hiring subsidies to reduce long-term unemployment among prime-aged jobseekers? Evidence from Belgium," ROA Research Memorandum 005, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    18. Viktor Steiner & Tobias Hagen, 2002. "Was kann die Aktive Arbeitsmarktpolitik in Deutschland aus der Evaluationsforschung in anderen europäischen Ländern lernen?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 3(2), pages 189-206, May.
    19. Sam Desiere & Bart Cockx, 2021. "How Effective Are Hiring Subsidies to Reduce Long-Term Unemployment among Prime-Aged Jobseekers? Evidence from Belgium," CESifo Working Paper Series 9325, CESifo.
    20. Cockx, Bart & Brasseur, Carine, 2003. "The demand for physician services: Evidence from a natural experiment," Journal of Health Economics, Elsevier, vol. 22(6), pages 881-913, November.
    21. Sam Desiere & Bart Cockx, 2021. "How effective are hiring subsidies to reduce long-term unemployment among prime-aged jobseekers? Evidence from Belgium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 21/1025, Ghent University, Faculty of Economics and Business Administration.
    22. Hagen, Tobias, 2003. "Three Approaches to the Evaluation of Active Labour Market Policy in East Germany Using Regional Data," ZEW Discussion Papers 03-27, ZEW - Leibniz Centre for European Economic Research.

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