Incentive Effects of Welfare Transfers in Two-Parent Families: An Evaluation Using Experimental Data

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IZA Seminar

Place: Schaumburg-Lippe-Str. 9, 53113 Bonn

Date: 18.06.2002, 12:15 - 13:30


Presentation by 

Eric Maurin (Paris School of Economics)


What are the effects of providing assistance to intact families when the principal earner is unemployed and denying it when s/he is employed? The existing literature suggests that this practice has strong work-disincentive effects and favors persistent unemployment and welfare dependency. In this paper we reassess this thesis using new US experimental data. Our findings differ from predictions based on survey data and simulations. Targeting assistance to families with an unemployed principal earner has only very limited disincentive impacts on familiesí work effort and actually lowers the welfare caseload.

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