Caught in the trap? The disincentive effect of social assistance

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Title: Caught in the trap? The disincentive effect of social assistance
Authors: Bargain, OlivierDoorley, Karina
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Date: Jul-2009
Online since: 2010-11-25T17:17:11Z
Abstract: While …financial incentives usually have a signifi…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 fi…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 …find that the RMI reduces the employment of uneducated single men by 7% - 10%. Important policy implications are drawn.
Funding Details: Not applicable
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
University College Dublin. Geary Institute
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP 09 06; UCD Geary Institute Discussion Paper Series; WP2009/17
Keywords: Regression discontinuityWelfareSocial assistanceLabor supply.
Subject LCSH: Welfare economics--France
Welfare recipients--Employment--France
Regression analysis
Labor supply--Effect of income maintenance programs on
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Language: en
Status of Item: Not peer reviewed
Appears in Collections:Geary Institute Working Papers
Economics Working Papers & Policy Papers

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