The Pitfalls of Work Requirements in Welfare-to-Work Policies: Experimental Evidence on Human Capital Accumulation in the Self-Sufficiency Project

This paper investigates whether policies that encourage recipients to exit welfare for full-time employment influence participation in educational activity. The Self-Sufficiency Project ('SSP') was a demonstration project where long-term welfare recipients randomly assigned to the treatment group were offered a generous earnings supplement if they exited welfare for full-time employment. We find that treatment group members were less likely to upgrade their education along all dimensions: high-school completion, enrolling in a community college or trade school, and enrolling in university. Thus, 'work-first'; policies that encourage full-time employment may reduce educational activity and may have adverse consequences on the long-run earnings capacity of welfare recipients. We also find that there was a substantial amount of educational upgrading in this population. For instance, among high-school dropouts at the baseline, 19% completed their diploma by the end of the demonstration. Finally, we simulate the consequences of the earnings supplement in the absence of adverse effects on educational upgrading. Doing so alters the interpretation of the lessons from the SSP demonstration.welfare policy, human capital, experimental methods, earnings supplementation

Measuring Unemployment and Structural Unemployment

This paper surveys recent research on how to measure labour market activities such as unemployment and labour force participation. The conventional approach to distinguishing between unemployment and non-participation is to use a priori reasoning and self-reported survey responses about current activities, specifically availability for work and job search. In contrast, the research surveyed here employs evidence on the subsequent consequences of current activities, in particular on transitions among labour force states. This general approach appears to be a promising method for bringing evidence to bear on these difficult measurement issues.

Economic Change and Worker Displacement in Canada: Consequences and Policy Responses

Change is an enduring feature of the economy and the labour market, even in normal times. The importance of adjusting to change, and of policies that promote adjustment, has been a recurring theme throughout David Dodge’s distinguished career. This paper deals with “displaced workers,†those who permanently lose their jobs because of changing economic circumstances. I examine what we know about displacement and its consequences, and assess policies designed to assist workers adversely affected by economic change. A central finding of research on displacement is that long tenure displaced workers -- those who have held their jobs for an extended period of time -- suffer much more from losing their jobs than do others. Canada’s Employment Insurance does not take into account this salient feature of the consequences of job loss. The paper discusses ways of addressing this deficiency in our primary social insurance program for job losers.labour market adjustment, job displacement, unemployment, unemployment insurance, adjustment assistance policies, wage insurance