Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/58817
Authors: 
Blundell, Richard
Francesconi, Marco
van der Klaauw, Wilbert
Year of Publication: 
2011
Series/Report no.: 
Discussion Paper series, Forschungsinstitut zur Zukunft der Arbeit 6050
Abstract: 
This paper formulates a simple model of female labor force decisions which embeds an in-work benefit reform and explicitly allows for announcement and implementation effects. We explore several mechanisms through which women can respond to the announcement of a reform that increases in-work benefits, including sources of intertemporal substitution, human capital accumulation, and labor market frictions. Using the model's insights and information of the precise timing of the announcement and implementation of a major UK in-work benefit reform, we estimate its effects on single mothers' behavior. We find important announcement effects on employment decisions. We show that this finding is consistent with the presence of short-run frictions in the labor market. Evaluations of this reform which ignore such effects produce impact effect estimates that are biased downwards by 15 to 35 percent.
Subjects: 
policy evaluation
in-work benefit
anticipation effects
labor market frictions
intertemporal substitution
JEL: 
D10
J13
J22
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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