Incentivizing last-resort social assistance clients: Evidence from a Finnish policy experiment

Heikki Palviainen ()
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Heikki Palviainen: Tampere University

International Tax and Public Finance, 2023, vol. 30, issue 1, No 1, 19 pages

Abstract: Abstract In 2002, the Finnish government introduced an earnings disregard experiment aimed at improving the incentives of low-income individuals who receive last-resort social assistance. The aim of the experiment was to reduce unemployment by providing social assistance clients better incentives to receive at least temporary or part-time work. This paper evaluates the employment effects of the experiment as an event study using coarsened exact matching (CEM) and difference-in-differences. On average, the results show no employment effects, but there is some evidence of positive employment effects on women.

Keywords: Difference-in-differences; Making work pay; Earnings disregard; Welfare (search for similar items in EconPapers)
JEL-codes: C93 H53 I38 J68 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10797-022-09739-9

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