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Incentivizing last-resort social assistance clients: Evidence from a Finnish policy experiment

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  • Heikki Palviainen

    (Tampere University)

Abstract

In 2002, the Finnish government introduced an earnings disregard experiment aimed at improving the incentives of low-income individuals who receive last-resort social assistance. The aim of the experiment was to reduce unemployment by providing social assistance clients better incentives to receive at least temporary or part-time work. This paper evaluates the employment effects of the experiment as an event study using coarsened exact matching (CEM) and difference-in-differences. On average, the results show no employment effects, but there is some evidence of positive employment effects on women.

Suggested Citation

  • Heikki Palviainen, 2023. "Incentivizing last-resort social assistance clients: Evidence from a Finnish policy experiment," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(1), pages 1-19, February.
    • Handle: RePEc:kap:itaxpf:v:30:y:2023:i:1:d:10.1007_s10797-022-09739-9
    DOI: 10.1007/s10797-022-09739-9
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    References listed on IDEAS

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    More about this item

    Keywords

    Difference-in-differences; Making work pay; Earnings disregard; Welfare;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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