The Intergenerational Effects of Requiring Unemployment Benefit Recipients to Engage in Non-Search Activities

Abstract

We use a quasi-experimental design and national administrative data to analyze the intergenerational effects of introducing non-search activity requirements for unemployment benefit recipients. The Mutual Obligations Initiative (MOI) required people aged 18–34 receiving unemployment benefits to undertake a range of non-search activities (e.g., volunteering, training) in addition to job search. The young adults (aged 23–28) we study were in early adolescence in 1999 when the MOI was introduced. Using a regression discontinuity approach, we find that those young adults whose fathers were subject to the MOI have a lower incidence of unemployment benefit receipt in comparison to those whose fathers were not. More detailed investigation suggests that completion of the mandated activities, role modeling, changes in attitudes, improved health, and greater support and stability are potential channels for this effect.

Keywords: Mutual Obligations Initiative, active labor market policy, unemployment, intergenerational treatment effects