The Effects of Mandatory Activation on Welfare Entry and Exit Rates
Safety Nets and Benefit Dependence
ISBN: 978-1-78190-936-2, eISBN: 978-1-78441-110-7
Publication date: 6 August 2014
Previous literature shows that activation requirements for welfare recipients reduce welfare participation. However, the effect of mandatory activation on welfare entry and exit rates has not been fully examined. In this article, we use a rich set of register data that covers the entire population of Stockholm to study how the introduction of activation programs aimed at unemployed welfare recipients in various city districts affects the probability of individuals entering and exiting social assistance (SA). Our results show that mandatory activation has no overall average effects on SA entry or SA exit. However, we do find a significant negative effect of mandatory activation on the SA entry rate for young individuals and for unmarried individuals without children. For unmarried individuals without children, we find a positive but statistically insignificant effect on the probability to leave SA. Thus, individuals with fewer family responsibilities seem to be more responsive to the reform.
We thank Anders Björklund, Matz Dahlberg, Jon Fiva, Kajsa Hanspers, Eva Mörk, Oddbjørn Raaum, Michael Svarer, Johan Vikström, the seminar participants at the Department of Economics, Uppsala University, and the participants in the course Topics in Applied Microeconometrics in Aarhus and at the IZA/OECD/World Bank Conference on Safety Nets and Benefit Dependence in Paris for their valuable comments and suggestions. Finally, we have benefited significantly from the reports of two anonymous referees and comments by the editors of this journal.
Persson, A. and Vikman, U. (2014), "The Effects of Mandatory Activation on Welfare Entry and Exit Rates", Safety Nets and Benefit Dependence (Research in Labor Economics, Vol. 39), Emerald Group Publishing Limited, Bingley, pp. 189-217. https://doi.org/10.1108/S0147-912120140000039005
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