IDEAS home Printed from https://ideas.repec.org/p/tam/wpaper/1819.html
   My bibliography  Save this paper

Evaluation of the Finnish Income Disregard Reform

Author

Listed:
  • Palviainen Heikki

    (Faculty of Management, University of Tampere)

Abstract

In 2002, the Finnish government introduced an earnings disregard reform aimed at improving the incentives of low-income individuals who receive last-resort social assistance. The aim of the reform was to decrease unemployment by providing social assistance clients better incentives to receive at least temporary or part-time work. This paper evaluates the employment effects of the reform using a quasi-experimental design. After a behavioral adjustment period, there are positive results for females, single-person households and individuals with earnings. No effects on the extensive margin imply that a behavioural response requires some attachment to the labour market. No transition from social assistance to longer-term employment is observed.

Suggested Citation

  • Palviainen Heikki, 2018. "Evaluation of the Finnish Income Disregard Reform," Working Papers 1819, University of Tampere, School of Management, Economics.
  • Handle: RePEc:tam:wpaper:1819
    as

    Download full text from publisher

    File URL: http://urn.fi/URN:ISBN:978-952-03-0697-7
    File Function: First version, 2018
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jordan D. Matsudaira & Rebecca M. Blank, 2014. "The Impact of Earnings Disregards on the Behavior of Low‐Income Families," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 33(1), pages 7-35, January.
    2. Edmark, Karin & Liang, Che-Yuan & Mörk, Eva & Selin, Håkan, 2012. "An Evaluation of the Swedish Earned Income Tax Credit," Working Paper Series 901, Research Institute of Industrial Economics.
    3. Lemieux, Thomas & Milligan, Kevin, 2008. "Incentive effects of social assistance: A regression discontinuity approach," Journal of Econometrics, Elsevier, vol. 142(2), pages 807-828, February.
    4. Austin Nichols & Jesse Rothstein, 2015. "The Earned Income Tax Credit," NBER Chapters,in: Economics of Means-Tested Transfer Programs in the United States, Volume 1, pages 137-218 National Bureau of Economic Research, Inc.
    5. Edmark, Karin & Liang, Che-Yuan & Mörk, Eva & Selin, Håkan, 2012. "Evaluation of the Swedish earned income tax credit," Working Paper Series, Center for Fiscal Studies 2012:2, Uppsala University, Department of Economics.
    6. Michalopoulos, Charles & Robins, Philip K. & Card, David, 2005. "When financial work incentives pay for themselves: evidence from a randomized social experiment for welfare recipients," Journal of Public Economics, Elsevier, vol. 89(1), pages 5-29, January.
    7. Olivier Bargain & Herwig Immervoll & Heikki Viitamäki, 2012. "No claim, no pain. Measuring the non-take-up of social assistance using register data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(3), pages 375-395, September.
    8. Marike Knoef & Jan C. van Ours, 2016. "How to stimulate single mothers on welfare to find a job: evidence from a policy experiment," Journal of Population Economics, Springer;European Society for Population Economics, vol. 29(4), pages 1025-1061, October.
    9. Austin Nichols & Jesse Rothstein, 2015. "The Earned Income Tax Credit (EITC)," NBER Working Papers 21211, National Bureau of Economic Research, Inc.
    10. Eissa, Nada & Hoynes, Hilary Williamson, 2004. "Taxes and the labor market participation of married couples: the earned income tax credit," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1931-1958, August.
    11. Marco Francesconi & Wilbert van der Klaauw, 2007. "The Socioeconomic Consequences of "In-Work" Benefit Reform for British Lone Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 42(1).
    12. V. Joseph Hotz & John Karl Scholz, 2006. "Examining the Effect of the Earned Income Tax Credit on the Labor Market Participation of Families on Welfare," NBER Working Papers 11968, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Difference-in-differences matching; making work pay; earnings disregard; welfare;

    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
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tam:wpaper:1819. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Markku Konttinen). General contact details of provider: http://edirc.repec.org/data/khutafi.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.