Social Assistance and Labour Supply
CESifo Working Paper Series No. 225
46 Pages Posted: 16 Jun 2001
Date Written: December 1999
The longitudinal, 1988-89, LMAS makes it possible to study the interaction between social assistance and labour supply while allowing for substantial time dependence. Tobit equations for hours worked on and off social assistance, which allow for endogenous selection of social assistance status, are estimated using FIML. Small, but statistically significant, effects for a social assistance benefit variable are obtained, particularly for females. A claw-back variable is not consistently useful. The wage rate has a consistently negative coefficient in the selection equations and is important in the Tobit equations. The paper attempts to reconcile results in earlier literature.
JEL Classification: I38, J22
Suggested Citation: Suggested Citation