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Welfare Reform on the Web (December 2006): Social security - Overseas

Are [sic] housing benefit an effective way to redistribute income? Evidence from a natural experiment in France

G. Fack

Labour Economics, vol.13, 2006, p.747-771

This study uses a French housing benefit reform to evaluate the impact of the subsidy on rent levels. The results indicate that one additional euro of housing benefit leads to an increase of 78 cents in the rent paid by new benefit claimants, leaving only 22 cents for the low-income household. The housing benefit reform led to increased demand from both low-income households and from students who used it to enable them to leave the parental home and become independent. This increase in demand was not matched by an increase in housing supply, leading to rent rises.

In-work policies in Europe: killing two birds with one stone?

O. Bargain and K. Orsini

Labour Economics, vol.13, 2006, p.667-697

Paper presents an extended analysis of “making work pay” policies in Finland, France and Germany. These countries are characterised by very small incentives to work for low-wage households, thanks to generous means-tested benefits systems. The effects of two different in-work transfers are simulated for these three countries. The first is a working tax credit similar to the British Working Families’ Tax Credit and the second is a simple wage subsidy. These two reforms illustrate the typical opposition between family- and individual-based instruments in the current debate on “making work pay” policies. The potential labour supply responses to the reforms and the subsequent redistributive impacts are assessed for each country using a structural discrete-choice model.

The Latin model of welfare: do “insertion contracts” reduce long-term dependence?

L. Ayala and M. Rodriguez

Labour Economics, vol.13, 2006, p.799-822

By the late 1980s France and Spain had implemented a new social policy with dual objectives. It aimed on the one hand to provide a basic level of economic protection, while on the other it also put in place measures to encourage low income households to enter the labour market (“social insertion” measures). This study aims to present an assessment of one such scheme, Madrid’s Ingreso Madrileño de Integración. Under this scheme all benefits recipients must sign an “insertion” contract. Social workers are obliged to design specific “insertion” measures for each claimant. The authors focus on so-called “insertion projects”, which consist of a mix of job search assistance, training and subsidised jobs, and explore their effectiveness in enabling claimants to permanently leave the welfare system.

Service users’ perspectives on the benefits system in Israel: a participatory action research approach

M. Krummer-Nevo and A. Barak

Social Policy and Administration, vol.40, 2006, p.774-790

Researchers have claimed that welfare service users’ voices and perspectives are a vital source of knowledge for social policy development. In this context, the authors conducted a participatory action research project in which users, academics, practitioners and activists collaborated to produce a position paper on the Israeli social welfare system. Some 78 persons living in poverty were asked, in group settings, to describe their experiences of the welfare system, their coping strategies, their attitudes towards the services, and their recommendations for improvement. The position paper which emerged from the process served as the basis of discussion at an academic conference.

Unemployment duration and the interactions between unemployment insurance and social assistance

M. Pellizzari

Labour Economics, vol.13, 2006, p.773-798

Existing research suggests that reductions in the generosity of unemployment benefits should lower levels of unemployment. Despite the large numbers of such reforms introduced in Europe in the past decades, evidence from various data sources shows little correlation with changes in unemployment levels. This paper suggests that the scant success of the reforms can be explained by the interactions between unemployment benefit and other forma of social assistance. Evidence from the European Community Household Panel suggests that unemployment benefit claimants who are also eligible for other forms of social assistance are less sensitive to changes in the level and duration of their benefits.

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