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Title: Unemployment, welfare benefits and the financial incentive to work
Author: Layte, Richard
Callan, Tim
Keywords: Unemployment
Social welfare
Financial incentives
Quantitative methods
Issue Date: 2001
Publisher: Economic & Social Research Institute
Citation: Layte, Richard; Callan, Tim . 'Unemployment, welfare benefits and the financial incentive to work'. - Economic & Social Review, Vol. 32, No. 2, July, 2001, pp. 103-129, Dublin: Economic & Social Research Institute
Abstract: Although disincentive effects associated with payments have been regulaly found in research in the US and UK, the UK research is disputed and effects have been notable by their absence in studies from Continental Europe. However, much of this research has been hindered by inadequate models of the structure of payments and estimates of in work incomes. In this paper we explicitly model the structue of benefit payments over time and estimate in work income using the SWITCH tax/benefit model. We find that the hazard of exit from unemployment is negatively related to unemployment payments, but distinctive effects appear to influence only those receiving Unemployment Benefts (UB) and are small when compared internationally. Moreover, the exit rate increases for this group as exhaustion approaches at 15 months duration. We find no significant distinctive effects amongst those receiving Unemployment Assistance (UA).
ISSN: 00129984
Appears in Collections:Economic and Social Review Archive: Complete Collection 1969-
The Economic and Social Review, Vol. 32, No. 2, July, 2001

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