In many OECD countries, welfare reforms have sought to increase employment among lone parents. Increasingly, the focus now is on securing sustained employment rather have people cycle in and out of work, which by itself does not tend to alleviate poverty. But little is known about how policies can encourage retention. With rich administrative data on welfare spells and time in employment, and a multi-spell, multi-state duration model, this paper assesses the impact of two time-limited in-work benefits (“In-Work Credit” and the “Employment Retention and Advancement Demonstration”) that were aimed at lone parents and were piloted in different parts of Great Britain during the 2000s. We assess the impact of the policies on flows off and back on to welfare benefits, and show how conditioning receipt of the in-work benefits on part-time or full-time hours of work affects employment and hours-of-work dynamics. Both policies got more lone parents into work, and that hours of work effects are important: conditioning the policy on part-time hours allowed some people to cut back from full-time hours, and conditioning on full-time hours encouraged part-time workers to work more. The ERA programme had stronger effects on employment than IWC (on a similar group of lone parents), despite the smaller financial incentive given by ERA. Finally, the In-Work Credit incentives had a small effect on job retention, while there were sizeable impacts of the ERA programme on encouraging lone parents to remain in work.
Presented by:
Mike Brewer (ISER)
Date & time:
June 17, 2015 11:00 am - June 17, 2015 12:00 pm
Venue:
Large Seminar Room (2N2.4.16)
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