Transitions from Welfare to Employment: Does the Ratio between Labor Income and Social Assistance Matter?
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Transitions from Welfare to Employment: Does the Ratio between Labor Income and Social Assistance Matter?
Schneider, Hilmar | Uhlendorff, Arne
Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 125 (2005), Iss. 1 : pp. 51–61
5 Citations (CrossRef)
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Schneider, Hilmar
Uhlendorff, Arne
Cited By
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Surprisingly small: effects of “generous” social benefits on re-employment of (quasi-) jobless households
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https://doi.org/10.1017/ics.2020.1 [Citations: 2]
Abstract
lt is often argued that the high level of welfare claims in Germany creates little incentive for workers with low productivity to seek for ajob. We examine the influence of the ratio between estimated potential labor income and the welfare payment level on the probability of leaving social welfare. We estimate a discrete time hazard rate model with unobserved heterogeneity using representative micro data from the German SocioEconomic Panel Study (SOEP). Our results show that the ratio has a positive effect on the probability of leaving social welfare. This effect is especially relevant for households with a potential labor income higher than their welfare payment level.