Search and Work in Optimal Welfare Programs

Nicola Pavoni, Ofer Setty and Giovanni L. Violante

No 275749, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: Actual welfare programs often feature work requirements in exchange for benefits and job-search assistance. We study the optimal design of welfare programs for the unemployed when the principal/ government can solicit either job-search effort or work effort from the agent or, alternatively, can relieve the agent from supplying effort and search on her behalf. Our main result is that when the generosity of the welfare program (i.e., its initial promised utility) is low, then the optimal program should be based on work activities. In contrast, when the initial generosity, or available budget, is high the optimal program should be based on search —and search assistance— activities.

Keywords: Financial Economics; Labor and Human Capital (search for similar items in EconPapers)
Pages: 27
Date: 2010
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Citations: View citations in EconPapers (2)

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Working Paper: Search and Work in Optimal Welfare Programs (2013)
Working Paper: Search and Work in Optimal Welfare Programs (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275749

DOI: 10.22004/ag.econ.275749

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