Assessing the Impact of a Wage Subsidy for Single Parents on Social Assistance

In 2002 the Quebec government implemented the "Action Emploi" (AE) program aimed at making work pay for long-term social assistance recipients (SA). AE oered a generous wage subsidy that could last up to three years to recipients who found a full-time job within twelve months. The program was implemented on an experimental basis for a single year. Based on little empirical evidence, a slightly modied version of the program was implemented on permanent basis in May 2008. The paper investigates the impact of the temporary program by focusing on the labour market transitions of the targeted population starting one year before the implementation of the program and up until the end of 2005. We use a multi-state multi-episode model. The endogeneity of the participation status is accounted for by treating AE as a distinct state and by allowing correlated unobserved factors to aect the transitions. The model is estimated by the method of simulated moments. Our results show that AE has indeed increased the duration of O-SA spells and decreased the duration of SA spells slightly. There is also some evidence that the response to the program varies considerably with unobserved individual characteristics.Wage subsidy, multi-state multi-episode transition model, social assistance

Assessing the Impact of a Wage Subsidy for Single Parents on Social Assistance in Canada

In 2002 the Quebec government implemented the "Action Emploi" (AE) program aimed at making work pay for long-term social assistance recipients (SA). AE offered a generous wage subsidy that could last up to three years to recipients who found a full-time job within twelve months. The program was implemented on an experimental basis for a single year. Based on little empirical evidence, a slightly modified version of the program was implemented on permanent basis in May 2008. The paper investigates the impact of the temporary program by focusing on the labour market transitions of the targeted population starting one year before the implementation of the program and up until the end of 2005. We use a multi-state multi-episode model. The endogeneity of the participation status is accounted for by treating AE as a distinct state and by allowing correlated unobserved factors to affect the transitions. The model is estimated by the method of simulated moments. Our results show that AE has indeed increased the duration of Off-SA spells and decreased the duration of SA spells slightly. There is also some evidence that the response to the program varies considerably with unobserved individual characteristics.multi-state multi-episode transition model, social assistance, wage subsidy

Assessing the Impact of a Wage Subsidy for Single Parents on Social Assistance

In 2002 the Quebec government implemented the “Action Emploi" (AE) program aimed at making work pay for long-term social assistance recipients (SA). AE offered a generous income supplement that could last up to three years to recipients who found a full-time job within twelve months. The program was implemented for a trial period of one year. Based on little empirical evidence, a slightly modified version of the program was implemented on a permanent basis in May 2008. The paper investigates the impact of the temporary program by focusing on the labour market transitions of the targeted population starting one year before the implementation of the program and up until the end of 2005. We use a multi-state multi-episode model. The endogeneity of the participation status is accounted for by treating AE as a distinct state and by allowing correlated unobserved factors to affect the transitions. The model is estimated by the method of simulated moments. Our results show that AE has indeed increased the duration of Off-SA spells and decreased the duration of SA spells slightly. There is also some evidence that the response to the program varies considerably with unobserved individual characteristics. En 2002, le gouvernement du Québec a mis sur pied le programme Action emploi (AE) qui visait à mieux rémunérer le travail des prestataires de l’aide sociale (AS) de longue durée. AE offrait un supplément de revenu généreux pouvant s’échelonner sur une période d’au plus trois ans aux prestataires ayant trouvé un emploi à temps plein à l’intérieur de 12 mois. Le programme a été mis en œuvre pendant une période d’essai d’un an. Sur la base d’une faible évidence empirique, une version légèrement modifiée du programme a été adoptée de façon permanente en mai 2008. Le document examine l’incidence du programme temporaire en mettant l’accent sur les transitions de la population ciblée sur le marché du travail, à compter de l’année précédant la mise en œuvre du programme jusqu’à la fin de 2005. Nous utilisons un modèle multi-états et multi-épisodes. Afin de prendre en compte l’endogénéité du statut de participation, nous considérons que le programme AE est un état distinct et nous permettons à des facteurs latents corrélés d’influencer les transitions. Le modèle est évalué par la méthode du maximum de vraisemblance simulée. Nos résultats démontrent que le programme a effectivement augmenté la durée des périodes de sortie de l’AS et diminué légèrement la durée des périodes de recours à l’AS. Le document montre également que la réponse au programme varie considérablement en fonction des caractéristiques individuelles latentes., assistance sociale, supplément de revenu, modèle de transition multi-états et multi-épisodes.

The Changing Intra-Household Resource Allocation in Russia

During the transition toward a market economy, Russian workers have had to face important structural changes in the labour market as well as dramatic changes in their real earnings. In the process, the wage gap between men and women has varied wildly over that period. In recent years, young women have embraced professional careers, are more mobile on the labour market, and tend to delay the birth of their first child. All these trends are likely to influence intra-household relations and consequently the family decision process. To investigate this matter, we estimate a household collective labour supply model. We generalize the specification so as to allow the sharing rule to change in a discrete manner between the pre and post 1998 financial crisis periods. The parameters of the sharing-rule indicate that the households have shifted to a new equilibrium in the post-1998 period. Indeed, husbands have become more egotistic and wives more altruistic: an increase in their relative wage translates into a smaller/larger transfer to their spouse.Collective model, sharing rule, Russian economic crisis

Assessing the Impact of Non-Response on the Treatment Effect in the Canadian Self-Sufficiency Experiment

In Canada, a policy aiming at helping single parents on social assistance become self-reliant was implemented on an experimental basis. The Self-Sufficiency Entry Effects Demonstration randomly selected a sample of 4,134 single parents who had applied for welfare between January 1994 and March 1995. It turned out only 3,315 took part in the experiment despite a 50% chance of receiving a generous, time-limited, earnings supplement conditional on finding a full-time jobs and leaving income assistance within a year. The purpose of this paper is to determine whether a non-response rate as high as 20% is likely to bias the measurement of the treatment effect. We compare the estimated impact of the program using experimental data only to that obtained using additional data on individuals not taking part in the experiment. We write the likelihood of various sets of information and obtain relevant estimates of program impact on welfare spell durations. We find strong evidence of non-response bias in the data. When we correct for the bias, we find that estimates that rely on experimental data only significantly underestimate the true impact of the program.Social experiment, non-response bias, duration model, social assistance

Career Starts and the Male-Female Wage Gap

The paper focuses on the early career patterns of young male and female workers. It investigates potential dynamic links between statistical discrimination, mobility, tenure and wage profiles. The model assumes that it is more costly for an employer to assess female workers' productivity and that the noise/signal ratio tapers off more rapidly for male workers. These two assumptions yield numerous theoretical predictions pertaining to gender wage gaps. These are tested using French data. It turns out most predictions are supported by the data. Dans ce travail, nous nous intéressons à l'évolution des carrières des jeunes travailleurs masculins et féminins au cours des premières années de vie active. Nous étudions dans un contexte dynamique les liens pouvant exister entre la discrimination statistique, la mobilité professionnelle, l'ancienneté en entreprise et les profils salariaux. Le modèle théorique postule qu'il est plus coûteux pour les employeurs d'évaluer la productivité des travailleurs féminins. On postule également que l'erreur de mesure portant sur la productivité disparaît plus rapidement pour les travailleurs masculins. Ces deux hypothèses génèrent de nombreuses prédictions théoriques falsifiables concernant les écarts salariaux hommes/femmes en début de carrière. Ces prédictions sont confrontées à des données françaises. Nous trouvons que la plupart des prédictions théoriques sont cohérentes avec les données.gender wage gap, job transitions, mover-stayer model, Écarts salariaux hommes/femmes, mobilité professionnelle, modèle mover-stayer

Heterogeneous Treatment and Self-Selection in a Wage Subsidy Experiment

The Self-Sufficiency Project (SSP) is a research and demonstration project that offered a generous time-limited income supplement to randomly selected welfare applicants under two conditions. The first, the eligibility condition, required that they remain on welfare for at least twelve months. The second, the qualification condition, required that they find a full-time job within twelve months after establishing eligibility. In this paper we focus on a neglected and important feature of the program, namely that the financial reward for becoming qualified is inversely related to the expected wage rate. Under very simple assumptions we show that those who have a low expected wage rate have a clear incentive to establish eligibility. Empirical non-parametric evidence strongly suggests that individuals self-select into eligibility. We jointly estimate a participation equation and a wage equation that are correlated through individual random effects. Our results show that the omission of self-selectivity into qualification translates into slightly overestimated treatment effects.SSP Applicant Study, heterogeneous treatment, self-selection

Work Absenteeism Due to a Chronic Disease

Research on health-related work absenteeism focuses primarily on moral hazard issues but seldom discriminates between the types of illnesses that prompt workers to stay home or seek care. This paper focuses on chronic migraine, a common and acute illness that can prove to be relatively debilitating. Our analysis is based upon the absenteeism of workers employed in a large Fortune-100 manufacturing firm in the United States. We model their daily transitions between work and absence spells between January 1996 up until December 1998. Only absences due to migraine and depression, its main comorbidity, are taken into account. Our results show that there is considerable correlation between the different states we consider. In addition, workers who are covered by the Blue Preferred Provided Organization tend to have shorter employment spells but also shorter migraine spells.migraine, absenteeism, insurance policies, transition models, unobserved heterogeneity

Assessing the Impact of a Wage Subsidy for Single Parents on Social Assistance in Canada

In 2002 the Quebec government implemented the "Action Emploi" (AE) program aimed at making work pay for long-term social assistance recipients (SA). AE offered a generous wage subsidy that could last up to three years to recipients who found a full-time job within twelve months. The program was implemented on an experimental basis for a single year. Based on little empirical evidence, a slightly modified version of the program was implemented on permanent basis in May 2008. The paper investigates the impact of the temporary program by focusing on the labour market transitions of the targeted population starting one year before the implementation of the program and up until the end of 2005. We use a multi-state multi-episode model. The endogeneity of the participation status is accounted for by treating AE as a distinct state and by allowing correlated unobserved factors to affect the transitions. The model is estimated by the method of simulated moments. Our results show that AE has indeed increased the duration of Off-SA spells and decreased the duration of SA spells slightly. There is also some evidence that the response to the program varies considerably with unobserved individual characteristics.Wage subsidy, multi-state multi-episode transition model, social assistance

The Impact of Government-Sponsored Training Programs on the Labor Market Transitions of Disadvantaged Men

Dans ce travail, nous cherchons à déterminer l'impact des mesures actives d'insertion sur les transitions des jeunes prestataires masculins de l'aide de dernier recours sur le marché du travail. La richesse des données à notre disposition nous permet de recréer de façon très détaillée l'historique de chaque prestataire sur une période relativement longue. Nous avons recours à un modèle de durée en temps continue pour estimer la densité des durées observées dans plus de sept états différents. L'endogénéité de la présence dans une mesure active est explicitement prise en compte. Nous analysons la sensibilité des paramètres estimés en comparant les résultats d'un modèle non-paramétrique standard avec ceux de plusieurs modèles paramétriques à deux ou trois facteurs de charge. Nos résultats montrent que les jeunes hommes peu scolarisés qui participent à des mesures actives destinées aux prestataires d'aide de dernier recours ont davantage de difficultés à s'intégrer au marché du travail que ceux qui ne participent pas à des telles mesures. En revanche, les mesures d'insertion offertes dans le cadre du programme d'assurance-emploi semblent donner de meilleurs résultats. De façon générale, la durée dans chacun des sept états considérés est sensible aux variables considérées dans l'analyse, soient les prestations d'aide de dernier recours, le salaire minimum, et le taux de chômage. The analysis focuses on the impact of government-sponsored training programs aimed at disadvantaged male youths on their labour market transitions. The richness of the data at our disposal allows us to recreate very detailed individual histories over a relatively long period. We use a continuous time duration model to estimate the density of duration times in as many as seven states, controlling for the endogeneity of an individual's training status. We investigate the sensitivity of the parameter estimates by comparing a typical non-parametric specification with a series of parametric two-factor loading models, as well as a parametric three-factor loading model. Our results show that young, poorly educated males who participate in welfare training programs do worse on the labour market than those who do not participate. On the other hand, participation in unemployment training programs provides them some benefits. In general, we find that duration times in any of the seven states considered are sensitive to variations in program parameters such as welfare benefits, policy variables such as the minimum wage rate, and in the economic environment as proxied by the unemployment rate.Modèle de durée multi-états multi-épisodes, hétérogénéité non-paramétrique, mesures active d'insertion, aide de dernier recours, multi-state multi-episods duration model, non-parametric heterogeneity, training programs, welfare