Working Paper Series, Department of Economics, Uppsala University
No 2010:11:
Dynamic effects of mandatory activation of welfare participants
Anna Persson ()
and Ulrika Vikman ()
Abstract: Previous literature shows that activation requirements for
welfare participants decrease welfare participation. However, the dynamics
have not been examined, and often only exit effects are analyzed. In this
paper, we look more closely at the transition rates into and out of
welfare. Using register data on the entire population of Stockholm, we are
able to capture how both entry and exit rates were affected when activation
requirements were introduced at different times in Stockholm’s city
districts. The results indicate that the main reduction in welfare
participation is due to a small increase in exit rates. The part of the
population that is at risk of entering into welfare, though, experiences a
reduction in entry rates due to the reform. There are also heterogeneous
effects, namely, large effects on entry rates for young individuals. In
addition, there are larger effects on exit rates for unmarried individuals
without children compared to the population as a whole.
Keywords: Welfare reform; mandatory activation program; welfare entry; welfare exit; (follow links to similar papers)
JEL-Codes: H31; I38; (follow links to similar papers)
37 pages, June 16, 2010
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