IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/2738.html

Assisting the transition from workfare to work : a randomized experiment

Author

Listed:
  • Galasso, Emanuela
  • Ravallion, Martin
  • Salvia, Agustin

Abstract

Randomly sampled workfare participants in a welfare-dependent region of Argentina were given a voucher that entitled an employer to a sizable wage subsidy. A second sample also received the option of skill training, while a third sample formed the control group. The authors analyze the effects of this scheme on participants'employment and income, using double-difference and instrumental-variables methods to dealwith potential experimental biases, including selective compliance with the randomized assignment. The authors find that compared with the control group, voucher recipients had a significantly higher probability of employment, though their current incomes were no higher. The impact was largely confined to women and younger workers. Labor supply effects appear to have been important. However, training had no significant impact. The experiment was cost-effective in reducing the government's welfare spending, since take-up of the subsidy by employers was low.

Suggested Citation

  • Galasso, Emanuela & Ravallion, Martin & Salvia, Agustin, 2001. "Assisting the transition from workfare to work : a randomized experiment," Policy Research Working Paper Series 2738, The World Bank.
    • Handle: RePEc:wbk:wbrwps:2738
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2002/01/18/000094946_02010904095776/Rendered/PDF/multi0page.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jalan, Jyotsna & Ravallion, Martin, 1999. "Income gains to the poor from workfare - estimates for Argentina's TRABAJAR Program," Policy Research Working Paper Series 2149, The World Bank.
    2. James J. Heckman & Hidehiko Ichimura & Petra E. Todd, 1997. "Matching As An Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(4), pages 605-654.
    3. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.
    4. Besley, Timothy & Coate, Stephen, 1992. "Workfare versus Welfare Incentive Arguments for Work Requirements in Poverty-Alleviation Programs," American Economic Review, American Economic Association, vol. 82(1), pages 249-261, March.
    5. Besley, Timothy & Coate, Stephen, "undated". "Workfare vs. Welfare: Incentive Arguments for Work Requirements in Poverty Alleviation Programs," Economic Research Papers 268349, University of Warwick - Department of Economics.
    6. Woodbury, Stephen A & Spiegelman, Robert G, 1987. "Bonuses to Workers and Employers to Reduce Unemployment: Randomized Trials in Illinois," American Economic Review, American Economic Association, vol. 77(4), pages 513-530, September.
    7. John Fitzgerald & Peter Gottschalk & Robert Moffitt, 1998. "An Analysis of Sample Attrition in Panel Data: The Michigan Panel Study of Income Dynamics," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 251-299.
    8. Howard S. Bloom, 1984. "Accounting for No-Shows in Experimental Evaluation Designs," Evaluation Review, , vol. 8(2), pages 225-246, April.
    9. Petra E. Todd & Jeffrey A. Smith, 2001. "Reconciling Conflicting Evidence on the Performance of Propensity-Score Matching Methods," American Economic Review, American Economic Association, vol. 91(2), pages 112-118, May.
    10. Lipton, Michael & Ravallion, Martin, 1995. "Poverty and policy," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 41, pages 2551-2657, Elsevier.
    11. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc.
    12. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
    13. Heckman, James J. & Lalonde, Robert J. & Smith, Jeffrey A., 1999. "The economics and econometrics of active labor market programs," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 31, pages 1865-2097, Elsevier.
    14. Gary Burtless, 1985. "Are Targeted Wage Subsidies Harmful? Evidence from a Wage Voucher Experiment," ILR Review, Cornell University, ILR School, vol. 39(1), pages 105-114, October.
    15. Lawrence F. Katz & Jeffrey R. Kling & Jeffrey B. Liebman, 2001. "Moving to Opportunity in Boston: Early Results of a Randomized Mobility Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 607-654.
    16. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-620, September.
    17. Brian Bell & Richard Blundell & John Reenen, 1999. "Getting the Unemployed Back to Work: The Role of Targeted Wage Subsidies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 339-360, August.
    18. Stephen A. Woodbury, 2009. "Unemployment," Chapters, in: Kenneth G. Dau-Schmidt & Seth D. Harris & Orly Lobel (ed.), Labor and Employment Law and Economics, chapter 17, Edward Elgar Publishing.
    19. Dubin, Jeffrey A. & Rivers, Douglas, 1993. "Experimental estimates of the impact of wage subsidies," Journal of Econometrics, Elsevier, vol. 56(1-2), pages 219-242, March.
    20. Heckman, James J, 1996. "Randomization as an Instrumental Variable: Notes," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 336-341, May.
    21. Joshua D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
    22. Dave M. O'Neill, 1982. "Employment Tax Credit Programs: The Effects of Socioeconomic Targeting Provisions," Journal of Human Resources, University of Wisconsin Press, vol. 17(3), pages 449-459.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ravallion, Martin, 2008. "Evaluating Anti-Poverty Programs," Handbook of Development Economics, in: T. Paul Schultz & John A. Strauss (ed.), Handbook of Development Economics, edition 1, volume 4, chapter 59, pages 3787-3846, Elsevier.
    2. Guido W. Imbens & Jeffrey M. Wooldridge, 2009. "Recent Developments in the Econometrics of Program Evaluation," Journal of Economic Literature, American Economic Association, vol. 47(1), pages 5-86, March.
    3. Abdellatif Chatri & Khadija Hadef & Naima Samoudi, 2021. "Micro-econometric evaluation of subsidized employment in morocco: the case of the "Idmaj" program," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 55(1), pages 1-13, December.
    4. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers 0283, National Bureau of Economic Research, Inc.
    5. Neil Garston & Tom Larson & Madhu S. Mohanty, 2006. "A Voucher Supplement To Existing Anti-Discrimination Programs In The Job Market," Eastern Economic Journal, Eastern Economic Association, vol. 32(2), pages 331-354, Spring.
    6. Brian Bell & Richard Blundell & John Reenen, 1999. "Getting the Unemployed Back to Work: The Role of Targeted Wage Subsidies," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 339-360, August.
    7. Elías, Víctor & Ruiz Núñez, Fernanda & Cossa, Ricardo & Bravo, David, 2004. "An Econometric Cost-Benefit Analysis of Argentina’s Youth Training Program," IDB Publications (Working Papers) 13053, Inter-American Development Bank.
    8. Fajnzylber, Pablo & Maloney, William F. & Rojas, Gabriel V. Montes, 2006. "Releasing constraints to growth or pushing on a string ? the impact of credit, training, business associations, and taxes on the performance of Mexican micro-firms," Policy Research Working Paper Series 3807, The World Bank.
    9. Jalan, Jyotsna & Ravallion, Martin, 2003. "Estimating the Benefit Incidence of an Antipoverty Program by Propensity-Score Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 19-30, January.
    10. Jeffrey Smith, 2000. "A Critical Survey of Empirical Methods for Evaluating Active Labor Market Policies," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 136(III), pages 247-268, September.
    11. Hämäläinen, Kari & Ollikainen, Virve, 2004. "Differential Effects of Active Labour Market Programmes in the Early Stages of Young People's Unemployment," Research Reports 115, VATT Institute for Economic Research.
    12. Ravallion, Martin & Galasso, Emanuela & Lazo, Teodoro & Philipp, Ernesto, 2001. "Do workfare participants recover quickly from retrenchment?," Policy Research Working Paper Series 2672, The World Bank.
    13. Jalan, Jyotsna & Ravallion, Martin, 1999. "Income gains to the poor from workfare - estimates for Argentina's TRABAJAR Program," Policy Research Working Paper Series 2149, The World Bank.
    14. Sianesi, Barbara, 2017. "Evidence of randomisation bias in a large-scale social experiment: The case of ERA," Journal of Econometrics, Elsevier, vol. 198(1), pages 41-64.
    15. Jochen Kluve & Boris Augurzky, 2007. "Assessing the performance of matching algorithms when selection into treatment is strong," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 533-557.
    16. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2000. "The Long-Term Gains from GAIN: A Re-Analysis of the Impacts of the California GAIN Program," NBER Working Papers 8007, National Bureau of Economic Research, Inc.
    17. Chatri, Abdellatif & Hadef, Khadija & Samoudi, Naima, 2021. "Micro-econometric evaluation of subsidized employment in morocco: the case of the "Idmaj" program," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-17.
    18. repec:iab:iabjlr:v:55:i::p:art.17 is not listed on IDEAS
    19. Peter R. Mueser & Kenneth R. Troske & Alexey Gorislavsky, 2007. "Using State Administrative Data to Measure Program Performance," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 761-783, November.
    20. Murgai, Rinku & Ravallion, Martin, 2005. "Is a guaranteed living wage a good anti-poverty policy?," Policy Research Working Paper Series 3640, The World Bank.
    21. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    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:wbk:wbrwps:2738. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.