Investigating the Mechanisms of Reliance to Social Assistance

SCHEME: CORE

CALL: 2015

DOMAIN: SC - Social and Economic Cohesion

FIRST NAME: Alessio

LAST NAME: Fusco

INDUSTRY PARTNERSHIP / PPP: No

INDUSTRY / PPP PARTNER:

HOST INSTITUTION: LISER

KEYWORDS: Social assistance, minimum guaranteed income, work incentives, neighbourhood effects, administrative data, welfare dependence, econometric methods, Luxembourg

START: 2016-09-01

END: 2019-08-31

WEBSITE: https://www.liser.lu/

Submitted Abstract

The recent economic crisis in many countries has produced an increase in the demand for last-resort social benefits together with increased pressures to control spending. As a result, the performance of social assistance schemes of these countries is constantly under the spotlight. Social Assistance programmes, and especially minimum income schemes, should achieve two objectives. First, they should avoid extreme hardship for families unable to do so through other income sources. Recent evidence shows that the tax benefit systems in place in many countries were successful in cushioning the short term effect of the crisis on household incomes. Second, social assistance schemes should prevent dependence for their beneficiaries, and rather promote attainment of self-sufficiency. This project focuses on the second objective and aims at ‘Investigating the Mechanisms of Reliance to Social Assistance’ (IMeRSe) using the specificity of the Luxembourg context and minimum guaranteed income scheme (Revenu Minimum Garanti, RMG) to analyse the empirical relevance of two possible mechanisms explaining welfare dependence: dependence arising from the design of the social assistance schemes, which involves various aspects of economic incentives, and from the development of a welfare culture, which is an aspect of social norms. Using unique Luxembourg administrative datasets, IMeRSe extends the literature on welfare dependence by (1) exploiting specific policy rules and reforms to analyse the work incentives of social assistance, (2) evaluating the effect of the RMG ‘payback condition’, a feature unique to the Luxembourg RMG scheme with important policy implications, on welfare spells length and (3) using an innovative method based on the availability of very detailed local data to analysing neighbourhood effects on welfare use.

This site uses cookies. By continuing to use this site, you agree to the use of cookies for analytics purposes. Find out more in our Privacy Statement