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Differential Effects of Expansions and Recessions on Social Assistance Duration: The Case of Regional Minimum Income Programmes in Spain

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  • Luis Ayala

    (UNED and Equalitas)

  • Mariya Melnychuk

    (University College London)

Abstract

In this paper we study the effects of the business cycle on welfare benefit duration and successful exits from the welfare programs. We construct durations for households entering these programs using administrative data for the total population participating in 2005-2016 in Minimum Income Integration programs in Spain,and combine these with province-level data on aggregate unemployment rate. We estimate discrete hazard models to analyse whether different labour conditions at entry to the program significantly affect the length of participation, and whether favourable conditions increase or decrease the hazard of a successful leaving the program. Our results show that higher unemployment rates are related to lower probability of successful exit from the program, and this effect becomes larger during recessions than in expansion periods.

Suggested Citation

  • Luis Ayala & Mariya Melnychuk, 2024. "Differential Effects of Expansions and Recessions on Social Assistance Duration: The Case of Regional Minimum Income Programmes in Spain," Hacienda Pública Española / Review of Public Economics, IEF, vol. 248(1), pages 115-141, March.
    • Handle: RePEc:hpe:journl:y:2024:v:248:i:1:p:115-141
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    References listed on IDEAS

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    More about this item

    Keywords

    Minimum imcome; Unemployment; Labour market conditions; Discrete hazard models;
    All these keywords.

    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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