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Income support, employment transitions and well-being

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  • Hetschko, Clemens
  • Schöb, Ronnie
  • Wolf, Tobias

Abstract

Using specific panel data of German welfare benefit recipients, we investigate the non-pecuniary life satisfaction effects of in-work benefits. Our empirical strategy combines difference-in-difference designs with synthetic control groups to analyse transitions of workers between unemployment, regular employment and employment accompanied by welfare receipt. Working makes people generally better off than being unemployed but employed welfare recipients do not reach the life satisfaction level of regular employees. This implies that welfare receipt entails non-compliance with the norm to make one's own living. Our findings allow us to draw cautious conclusions on employment subsidies paid as welfare benefits.

Suggested Citation

  • Hetschko, Clemens & Schöb, Ronnie & Wolf, Tobias, 2020. "Income support, employment transitions and well-being," Labour Economics, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:labeco:v:66:y:2020:i:c:s0927537120300919
    DOI: 10.1016/j.labeco.2020.101887
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    Cited by:

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    2. Humaira Kamal Pasha, 2024. "Smart access and smart protection for welfare gain in Europe during COVID‐19: An empirical investigation using real‐time data," Bulletin of Economic Research, Wiley Blackwell, vol. 76(1), pages 41-66, January.
    3. Alan Piper, 2022. "Optimism, pessimism and life satisfaction: an empirical investigation," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 69(2), pages 177-208, June.
    4. Alan Piper, 2021. "An Economic Analysis of the Empty Nest Syndrome: What the Leaving Child Does Matters," SOEPpapers on Multidisciplinary Panel Data Research 1119, DIW Berlin, The German Socio-Economic Panel (SOEP).
    5. Tom Günther & Jakob Conradi & Clemens Hetschko, 2024. "Socialism, Identity and the Well-Being of Unemployed Women," CESifo Working Paper Series 11154, CESifo.
    6. Joseph W. Sakshaug & Jonas Beste & Mark Trappmann, 2023. "Effects of mixing modes on nonresponse and measurement error in an economic panel survey," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 57(1), pages 1-16, December.
    7. Suppa, Nicolai, 2021. "Unemployment and subjective well-being," GLO Discussion Paper Series 760, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Life satisfaction; Subsidized employment; Unemployment; Income support; In-work benefits; Social identity; Social norms;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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