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

Heikki Palviainen
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Heikki Palviainen: Faculty of Management and Business, Tampere University

No 2132, Working Papers from Tampere University, School of Management and Business, Economics

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 as- sistance. 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 coars- ened exact matching (CEM) and difference-in-differences. On average, the results show no employment effects, but there is some evidence on 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)
Pages: 23 pages
Date: 2021-10
New Economics Papers: this item is included in nep-eur, nep-exp and nep-lab
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Downloads: (external link) Third version, 2021 (application/pdf)

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