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Efficient Training Programs for Workers on Welfare

Author

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  • Ofer Setty

    (NYU)

  • Gianluca Violante

    (NYU)

  • Nicola Pavoni

    (UCL)

Abstract

This paper extends the recent recursive contract literature on optimal unemployment insurance and optimal welfare-to-work programs in order to study the constrained-efficient dynamic contract between government and unemployed worker when a costly "training technology" is available. We first analyze qualitatively the features of the contract. Next, we derive some quantitative implications by calibrating our model through a novel data source, the National Evaluation of Welfare-to-Work Strategies (NEWWS), a detailed panel dataset following over 3,000 women enrolled in a variety of training programs in several U.S. locations during the 1990s.

Suggested Citation

  • Ofer Setty & Gianluca Violante & Nicola Pavoni, 2009. "Efficient Training Programs for Workers on Welfare," 2009 Meeting Papers 685, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:685
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