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Please use this identifier to cite or link to this item: http://hdl.handle.net/10197/2603

Title: Caught in the trap? The disincentive effect of social assistance
Authors: Bargain, Olivier
Doorley, Karina
Keywords: Regression discontinuity
Welfare
Social assistance
Labor supply.
Issue Date: Jul-2009
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
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.
URI: http://hdl.handle.net/10197/2603
Appears in Collections:Geary Institute Working Papers
Economics Working Papers & Policy Papers

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