Why Many Eligible Individuals Choose Not to Go on Welfare
Pak Wai Liu,
Jie Zhang () and
Economic Inquiry, 2005, vol. 43, issue 2, 385-400
This article investigates why many eligible for welfare do not participate. We show that on-the-job wage-rising potential is the key factor motivating nonparticipation. Although individuals with very low earnings and little wage-rising potential are typically welfare recipients, those with good wage-rising potential may choose to work, participate in old age, or never participate. Nonparticipation remains the best choice for eligible individuals with large wage-rising potential even if universal old-age social security is available. We will also apply this model to a comprehensive welfare system in Hong Kong.(JEL H53, I38, J31) Copyright 2005, Oxford University Press.
JEL-codes: H53 I38 J31 (search for similar items in EconPapers)
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