Can Welfare Conditionality Combat High School Dropout?

45 Pages Posted: 18 Jan 2016

See all articles by Oeystein Hernaes

Oeystein Hernaes

University of Oslo - Ragnar Frisch Centre for Economic Research

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

Based on administrative data, we analyze empirically the effects of stricter conditionality for social assistance receipt on welfare dependency and high school completion rates among Norwegian youths. Our evaluation strategy exploits a geographically differentiated implementation of conditionality. The causal effects are identified on the basis of larger-than-expected within-municipality changes in outcomes that not only coincide with the local timing of conditionality implementation, but do so in a way that correlates with individual ex ante predicted probabilities of becoming a social assistance claimant. We find that stricter conditionality significantly reduces welfare claims and increases high school completion rates.

Keywords: social assistance, activation, conditionality, welfare reform, school dropout

JEL Classification: H55, I29, I38, J18

Suggested Citation

Hernaes, Oeystein and Markussen, Simen and Røed, Knut, Can Welfare Conditionality Combat High School Dropout?. IZA Discussion Paper No. 9644, Available at SSRN: https://ssrn.com/abstract=2716585

Oeystein Hernaes (Contact Author)

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

Simen Markussen

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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