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Welfare Reform on the Web (March 1999): Social Security - Overseas

DRUG USE AND AFDC PARTICIPATION : IS THERE A CONNECTION?

R. Kaestner
Journal of Policy Analysis and Management, vol. 17, no. 3, Summer 1998, p. 495-520

Study indicates that past year drug use, predominantly marijuana use, is positively related to future welfare participation for both black and nonblack women in the US. The observed effect is most likely to reflect differences in the propensity to participate in welfare or in perception of stigma attached to welfare participation. In other words, drug use is correlated with reduced welfare stigma.

EXPERIENCE RATING AND GENEROSITY OF UNEMPLOYMENT INSURANCE : EFFECT ON COUNTY AND METROPOLITAN UNEMPLOYMENT RATES

R. L. Moomaw
Journal of labor research, vol. 19, no. 3, Summer 1998, p. 543-560

Finds in a study of the situation in the US, a generous unemployment compensation system is associated with higher levels of unemployment and greater experience rating is associated with lower levels. Experience rating implies that firms have an incentive to avoid layoffs : it implies that a firm's contribution to the unemployment insurance (UI) system increases in response to compensation paid to unemployed individuals who last worked for the firm.

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