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Title:The Transition from Welfare to Work and the Role of Potential Labor Income PDF Logo
Authors:Schneider, Hilmar
Uhlendorff, Arne
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1420
Abstract:It is often argued that the high level of welfare claims in Germany causes little incentive for workers with low productivity to seek for a job. We examine the influence of the ratio between estimated potential labor income and the welfare payment level on the probability of leaving social welfare. Using the GSOEP, we estimate a discrete time hazard rate model with competing risks and unobserved heterogeneity. Our results show that the ratio has a positive effect on the probability of leaving social welfare. This effect is especially relevant for households with a potential labor income higher than their welfare payment level.
Subjects:social welfare
labor supply
duration analysis
JEL:C41
J64
I38
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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