Leaving Poverty Behind? The Effects of Generous Income Support Paired with Activation

31 Pages Posted: 21 Jun 2014

See all articles by Simen Markussen

Simen Markussen

University of Oslo - Ragnar Frisch Centre for Economic Research

Knut Roed

Ragnar Frisch Centre for Economic Research; IZA Institute of Labor Economics

Abstract

We evaluate a comprehensive activation program in Norway targeted at hard-to-employ social assistance claimants with reduced work capacity. The program offers a combination of tailored rehabilitation, training and job practice, and a generous, stable, and non-means-tested benefit. Its main aims are to mitigate poverty and subsequently promote self-supporting employment. Our evaluation strategy exploits a geographically staggered program introduction, and the causal effects are identified on the basis of changes in employment prospects that coincide with local program implementation in a way that correlates with the predicted probability of becoming a participant. We find that the program raised employment prospects considerably.

Keywords: poverty, vocational rehabilitation, social insurance, treatment effects, program evaluation

JEL Classification: C21, C26, H55, I30, J24

Suggested Citation

Markussen, Simen and Røed, Knut, Leaving Poverty Behind? The Effects of Generous Income Support Paired with Activation. IZA Discussion Paper No. 8245, Available at SSRN: https://ssrn.com/abstract=2457348

Simen Markussen (Contact Author)

University of Oslo - Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0317 Oslo
Norway

Knut Røed

Ragnar Frisch Centre for Economic Research ( email )

Gaustadalleen 21
N-0349 Oslo
Norway

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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