Safety Net Still in Transition: Labour Market Incentive Effects of Extending Social Support in Poland

Peter Haan and Michal Myck ()
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Michal Myck: DIW Berlin, IFS and IZA

No 3157, IZA Discussion Papers from Institute for the Study of Labor (IZA)

Abstract: Many aspects of the economic transition which started in 1989 in Poland are by now complete. However, the route Polish governments have so far taken concerning the system of support for low-income families still implies very different poverty alleviation schemes compared to those found in many developed countries. We examine the Polish system of social assistance in a comparative context with Germany and focus on its implications for financial incentives to work. The paper shows the effect of extending the financial support system for poorest families in Poland on labour market incentives. We demonstrate that assumptions concerning sharing of resources among families within households have significant implications on the resulting financial incentives and importantly change the implied consequences of the reforms. This is the case especially for single-adult families. 74% of single adults without children, and 53% of lone parents in Poland live in multi-family households.

Keywords: work incentives; social assistance; within-household sharing; transition (search for similar items in EconPapers)
JEL-codes: J21 I38 D13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-tra
Date: Written 2007-11
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