TY - JOUR
T1 - Caught in the trap? Welfare's disincentive and the labor supply of single men.
AU - Bargain, Olivier
AU - Doorley, Karina
PY - 2011/1/1
Y1 - 2011/1/1
N2 - outh unemployment is particularly large in many industrialized countries and has dramatic consequences in both the short and long-term. While there is abundant evidence about the labor supply of married women and single mothers, little is known about how young (childless) singles react to financial incentives. The French minimum income (Revenu Minimum d'Insertion, RMI), often accused of generating strong disincentives to work, offers a natural setting to study this question since childless single individuals, primarily males, constitute the core group of recipients. Exploiting the fact that childless adults under age 25 are not eligible for this program, we conduct a regression discontinuity analysis using French Census data. We find that the RMI reduces the participation of uneducated single men by 7–10% at age 25. We conduct an extensive robustness check and discuss the implications of our results for youth unemployment and current policy developments.
AB - outh unemployment is particularly large in many industrialized countries and has dramatic consequences in both the short and long-term. While there is abundant evidence about the labor supply of married women and single mothers, little is known about how young (childless) singles react to financial incentives. The French minimum income (Revenu Minimum d'Insertion, RMI), often accused of generating strong disincentives to work, offers a natural setting to study this question since childless single individuals, primarily males, constitute the core group of recipients. Exploiting the fact that childless adults under age 25 are not eligible for this program, we conduct a regression discontinuity analysis using French Census data. We find that the RMI reduces the participation of uneducated single men by 7–10% at age 25. We conduct an extensive robustness check and discuss the implications of our results for youth unemployment and current policy developments.
KW - Regression discontinuity
KW - Welfare
KW - social assistance
KW - labor supply
U2 - 10.1016/j.jpubeco.2011.05.007
DO - 10.1016/j.jpubeco.2011.05.007
M3 - Article
SN - 0047-2727
VL - 95
SP - 1096
EP - 1110
JO - Journal of Public Economics
JF - Journal of Public Economics
IS - 9-10
ER -