Leaving Poverty Behind? –The Effects of a Generous Income Support Paired with Activation

Speaker: Knut Røed, Senior Research Economist, The Ragnar Frisch Centre for Economic Research.

Abstract

We evaluate a comprehensive activation program in Norway targeted at hard-to-employ social assistance claimants with reduced work capacity. The program offers a combination of tailored rehabilitation, training and job practice, and a generous, stable, and non-means-tested benefit. Its main aims are to mitigate poverty and subsequently promote self-supporting employment. Our evaluation strategy exploits a geographically staggered program introduction, and the causal effects are identified on the basis of changes in employment prospects that coincide with local program implementation in a way that correlates with the predicted probability of becoming a participant. We find that the program raised employment prospects considerably.

Published Sep. 16, 2014 12:07 PM - Last modified Nov. 24, 2014 11:31 AM