The Employment Effects of Generous and Unconditional Cash Support

Xavier Ramos (), Timo Verlaat () and Federico Todeschini ()
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Xavier Ramos: Universitat Autònoma de Barcelona
Timo Verlaat: Utrecht University
Federico Todeschini: Universitat Pompeu Fabra

No 638, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: While unconditional cash transfers have been studied extensively in developingcountries, little is known about their effects in a wealthier context. Through arandomized controlled trial, we study the employment effects of a generous andunconditional transfer targeting low-income families in Spain. Two years into theprogram, subjects assigned to treatment are 20 percent less likely to work thansubjects assigned to a control group. Assignment to an activation plan does notattenuate adverse effects; a more lenient transfer withdrawal rate does. It appearsthat effects are driven by subjects with children, suggesting substitution of labourfor care tasks.

Keywords: welfare reform; cash transfer; basic income; policy evaluation; RCT (search for similar items in EconPapers)
JEL-codes: C93 H53 I38 J64 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2023-03
New Economics Papers: this item is included in nep-exp, nep-lab and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2023-638

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