The Heterogeneous Effects of Social Assistance and Unemployment Insurance: Evidence from a Life-Cycle Model of Family Labor Supply and Savings

  • We empirically analyze the heterogeneous welfare effects of unemployment insurance and social assistance. We estimate a structural life-cycle model of singles’ and married couples’ labor supply and savings decisions. The model includes heterogeneity by age, education, wealth, sex and household composition. In aggregate, social assistance dominates unemployment insurance; however, the opposite holds true for married men, whose leisure time declines more than that of their spouses when unemployment insurance is reduced. A revenue-neutral rebalancing of social support away from unemployment insurance and toward social assistance increases aggregate welfare. Income pooling in married households decreases the welfare value of social assistance.

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Metadaten
Document Type:Working Paper
Language:English
Author(s):Peter Haan, Victoria Prowse
Parent Title (German):Berlin School of Economics Discussion Papers
Hertie Collections (Serial Number):Berlin School of Economics Discussion Papers (20)
Publication year:2023
Publishing Institution:Hertie School
Number pages:87
Related URL:https://berlinschoolofeconomics.de/insights/bse-discussion-papers
DOI:https://doi.org/10.48462/opus4-5012
Release Date:2023/06/07
Edition:No. 20
Hertie School Research:BerlinSchoolOfEcon_Discussion_Papers
Licence of document (German):Creative Commons - CC BY - 4.0 International
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