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Caught in the trap? The disincentive effect of social assistance
Author(s)
Date Issued
2009-07
Date Available
2010-11-25T17:17:11Z
Abstract
While Â…financial incentives usually have a signifiÂ…cant effect on the labor supply of married women
and single mothers, the evidence about the participation elasticity of childless singles, and single males
especially, is more scant. This is, however, important in countries like France and Germany, where
single individuals constitute the core of social assistance recipients. As yet, there is no conclusive
evidence about whether, and to what extent, this group is affected by the fiÂ…nancial disincentives embedded in the generous redistributive programs in place in these countries. In this paper, we exploit a
particular feature of the main welfare scheme in France (Revenu Minimum d'Insertion, RMI), namely
that childless adults under age 25 are not eligible for it. Using a regression discontinuity approach and
the French micro-census data, we Â…find that the RMI reduces the employment of uneducated single
men by 7% - 10%. Important policy implications are drawn.
Sponsorship
Not applicable
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
University College Dublin. Geary Institute
Series
UCD Centre for Economic Research Working Paper Series
WP 09 06
UCD Geary Institute Discussion Paper Series
WP2009/17
Classification
H52
J21
Subject – LCSH
Welfare economics--France
Welfare recipients--Employment--France
Regression analysis
Labor supply--Effect of income maintenance programs on
Web versions
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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