Andreas Orebo Hansen ()
Andreas Orebo Hansen: Fonden Kraka og Københavns Universitet, Økonomisk Institut
Abstract: This paper evaluates the impact of the Danish job prize scheme targeted long-term unemployed single parents on the labor force participation of single mothers. The persons eligible for the program are single parents with children who have been on welfare benefits for at least 47 weeks from the 3rd of August 2009 until the 2nd of August 2010 and is eligible for extra child allowances. The job prize amounts to 600 DKK. net of taxes per month. I identify the impact of the job prize scheme by comparing the change in participation rate for single mothers to the change in participation rate for single mothers who is not eligible for child allowances, and therefore not eligible for the job prize. I also analyze the impact compared to single women without children. Using a classical difference-in-differences approach, I find that the job prize scheme increases the accumulated extent of employment of single mothers by up to 6.1 weeks relative to that of single mothers who is not eligible for child allowances and up to 5.7 weeks relative to that of single women without children. The increase in the accumulated extent of employment of single mothers corresponds to roughly 750 annual full-time employees.
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