The Employment Effects of Generous And Unconditional Cash Support

58 Pages Posted: 16 Mar 2023

See all articles by Timo Verlaat

Timo Verlaat

CPB Netherlands Bureau of Economic Policy Analysis; Utrecht University - School of Economics

Federico Todeschini

Universitat Pompeu Fabra

Xavier Ramos

Universitat Autònoma de Barcelona; Institute for the Study of Labor (IZA)

Abstract

While unconditional cash transfers have been studied extensively in developing countries, little is known about their effects in a wealthier context. Through a randomized controlled trial, we study the employment effects of a generous and unconditional transfer targeting low-income families in Spain. Two years into the program, subjects assigned to treatment are 20 percent less likely to work than subjects assigned to a control group. Assignment to an activation plan does not attenuate adverse effects; a more lenient transfer withdrawal rate does. It appears that effects are driven by subjects with children, suggesting substitution of labour for care tasks.

Keywords: welfare reform, cash transfer, basic income, policy evaluation, RCT

Suggested Citation

Verlaat, Timo and Todeschini, Federico and Ramos, Xavier, The Employment Effects of Generous And Unconditional Cash Support. Available at SSRN: https://ssrn.com/abstract=4390260 or http://dx.doi.org/10.2139/ssrn.4390260

Timo Verlaat

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

HOME PAGE: http://https://www.cpb.nl/medewerkers/timo-verlaat

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands

HOME PAGE: http://https://www.uu.nl/medewerkers/TLLVerlaat

Federico Todeschini

Universitat Pompeu Fabra ( email )

Xavier Ramos (Contact Author)

Universitat Autònoma de Barcelona ( email )

Dept. Economia Aplicada
Campus UAB
Bellaterra, Barcelona 08193
Spain

Institute for the Study of Labor (IZA)

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

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