Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/35996
Authors: 
Cappellari, Lorenzo
Jenkins, Stephen P.
Year of Publication: 
2009
Series/Report no.: 
IZA Discussion Papers 4457
Abstract: 
We analyze the dynamics of social assistance benefit (SA) receipt among working-age adults in Britain between 1991 and 2005. The decline in the annual SA receipt rate was driven by a decline in the SA entry rate, rather than by the SA exit rate (which actually declined too). We examine the determinants of these trends using a multivariate dynamic random effects probit model of SA entry and exit probabilities applied to British Household Panel Survey data. The model estimates and accompanying counterfactual simulations highlight the importance of two factors - the decline in the unemployment rate over the period, and other changes in the socioeconomic environment including two reforms to the income maintenance system in the 1990s. The results also reveal a substantial heterogeneity in SA annual transition rates.
Subjects: 
Benefits
income dynamics
social assistance
welfare
dynamic random effects probit
JEL: 
I38
C33
C35
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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