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Human well-being and in-work benefits: a randomized controlled trial

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  • Dr Richard Dorsett

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Abstract

Many politicians believe they can intervene in the economy to improve people’s lives. But can they? In a social experiment carried out in the United Kingdom, extensive in-work support was randomly assigned among 16,000 disadvantaged people. We follow a sub-sample of 3,500 single parents for 5 ensuing years. The results reveal a remarkable, and troubling, finding. Long after eligibility had ceased, the treated individuals had substantially lower psychological well-being, worried more about money, and were increasingly prone to debt. Thus helping people apparently hurt them. We discuss a behavioral framework consistent with our findings and reflect on implications for policy.

Suggested Citation

  • Dr Richard Dorsett, 2014. "Human well-being and in-work benefits: a randomized controlled trial," National Institute of Economic and Social Research (NIESR) Discussion Papers 424, National Institute of Economic and Social Research.
    • Handle: RePEc:nsr:niesrd:11791
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    Cited by:

    1. Bruno Van der Linden, 2016. "Do in-work benefits work for low-skilled workers?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 246-246, March.
    2. Boyd-Swan, Casey & Herbst, Chris M. & Ifcher, John & Zarghamee, Homa, 2016. "The earned income tax credit, mental health, and happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 18-38.
    3. Wolf, Tobias & Hetschko, Clemens & Schöb, Ronnie, 2016. "Income Support, (Un-)Employment and Well-Being," Annual Conference 2016 (Augsburg): Demographic Change 145860, Verein für Socialpolitik / German Economic Association.
    4. Dräger, Vanessa, 2015. "Do Employment Protection Reforms Affect Well-Being?," IZA Discussion Papers 9114, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    well-being; benefits; controlled trial;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D60 - Microeconomics - - Welfare Economics - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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