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The Employment Effects of Generous and Unconditional Cash Support

Author

Listed:
  • Xavier Ramos

    (Universitat Autònoma de Barcelona)

  • Timo Verlaat

    (Utrecht University)

  • Federico Todeschini

    (Universitat Pompeu Fabra)

Abstract

While unconditional cash transfers have been studied extensively in developingcountries, little is known about their effects in a wealthier context. Through arandomized controlled trial, we study the employment effects of a generous andunconditional transfer targeting low-income families in Spain. Two years into theprogram, subjects assigned to treatment are 20 percent less likely to work thansubjects assigned to a control group. Assignment to an activation plan does notattenuate adverse effects; a more lenient transfer withdrawal rate does. It appearsthat effects are driven by subjects with children, suggesting substitution of labourfor care tasks.

Suggested Citation

  • Xavier Ramos & Timo Verlaat & Federico Todeschini, 2023. "The Employment Effects of Generous and Unconditional Cash Support," Working Papers 638, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2023-638
    as

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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2023-638.pdf
    File Function: First version, 2023
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    References listed on IDEAS

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    More about this item

    Keywords

    welfare reform; cash transfer; basic income; policy evaluation; RCT;
    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
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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