Why cash transfer programs can both stimulate and slow down job finding

Artikel

This article analyzes the behavioral effects of cash transfer programs when jobless people need to have access to a minimum consumption level. Our model reconciles recent evidence about negligible or favorable effects of cash transfers on job-finding rates and the more standard view of negative effects. When unemployment compensation, if any, is low enough, we argue that cash transfer programs can raise the hiring probability. Our framework is flexible enough to generate the standard conclusion as well. Looking specifically at unemployment compensation, its optimal level is generally higher than when a lower bound on consumption is ignored.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: IZA Journal of Labor Economics ; ISSN: 2193-8997 ; Volume: 8 ; Year: 2019 ; Issue: 5 ; Pages: 1-27 ; Warsaw: Sciendo

Classification and Topics

• Classification: Wirtschaft ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Taxation and Subsidies: Efficiency; Optimal Taxation ; Measurement and Analysis of Poverty ; Unemployment: Models, Duration, Incidence, and Job Search ; Unemployment Insurance; Severance Pay; Plant Closings
• Subject: poverty ; unemployment ; optimal insurance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mesén Vargas, Juliana ; Van der Linden, Bruno
• Event: Veröffentlichung
• (who): Sciendo
• (where): Warsaw
• (when): 2019

Further information

• DOI: doi:10.2478/izajole-2019-0005
• Handle: http://hdl.handle.net/10419/222151
• Last update: 10.03.2025, 11:41 AM CET