Are Lone Mothers Responsive to Policy Changes? Evidence from a Workfare Reform in a Generous Welfare State*

Abstract

There is a heated debate in many developed countries about how to design a welfare system that moves lone mothers off welfare and into work. We analyze the consequences of a major Norwegian workfare reform of the generous welfare system for lone mothers. The reform imposed work requirements and time limits on welfare receipt, while raising in‐work benefits. Our difference‐in‐differences estimates show that the reform was successful in improving labor‐market participation and in increasing the earnings of lone mothers. However, the reform was associated with income loss and increased poverty among a sizeable subgroup of lone mothers, who were unable to offset the loss of out‐of‐work benefits with gains in earnings.

Hvordan påvirker økt bruk av vilkår for sosialhjelp sysselsetting og lønnsfordeling?

“…Reformen reduserte mottak av slik trygd og hadde positive gjennomsnittsvirkninger på sysselsetting, lønn og inntekt, og reduserte fattigdom. Saerlig relevant er de bidragene som evaluerte fordelingsvirkninger og var del av debatten om hvorvidt inntekt og/eller konsum falt for noen mottakere selv om gjennomsnittsvirkningen var positiv (Blank & Schoeni 2003;Bitler, Gelbach & Hoynes 2006;Meyer & Sullivan 2008), et tema også tatt opp i en norsk kontekst (Mogstad & Pronzato 2012).…”

Fighting Lone Mothers' Poverty Through In-Work Benefits: Methodological Issues and Policy Suggestions

“…evaluate the effect of the reform by comparing the effect of becoming a lone mother in the prereform and post-reform period (Mogstad and Pronzato, 2012):…”

“…But more importantly, the human capital levels and socio-economic status of lone fathers have been shown to differ substantially from those of lone mothers, presumably due to a strong selection process for lone fathers to actually get daily custody of their children (Kjeldstad and Rønsen, 2004). Mogstad and Pronzato (2012), using a quasi-experimental model, find a positive effect of the reform on lone mothers' labour supply and a small reduction in poverty. Is the best result that policy makers could obtain in terms of poverty reduction given the amount of public resources invested?…”

Jean-Louis Klein et Christine Champagne (dir.), Initiatives locales et lutte contre la pauvreté et l’exclusion, Québec, Presses de l’Université du Québec, 2011, 325 p. (Coll. Innovation sociale)

“…Ce travail d'exploration des facteurs déterminants dans le succès de ces initiatives enrichit l'état actuel de la connaissance dominé par des études descriptives (Fréchet et al, 2011;Gelot, 2011;Bibi et Duclos, 2009), explicatives (Berthoud et al, 2009Bruneteaux et Terrolle (dir. ), 2010;Lefèvre et al, 2011;Paugam, 2005, Sen, 1981 ou évaluatives (Duflo, 2010;Ilcan et Lacey, 2011;Mogstad et Pronzato, 2008;Valletta, 2006).…”