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

Abstract

Lone mothers are overrepresented among poor people in many European countries. In 1998, in Norway, a welfare reform increased the amount of benefits and introduced working requirements. Using a quasi-experimental model, Mogstad and Pronzato (2012) 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? In this paper, I estimate a discrete choice model of earnings and welfare participation decisions, and use the behavioural estimates to derive the policy parameters which would have minimized poverty among lone mothers. JEL-Code: I380, J220, C250.

Analysing tax-benefit reforms in the Netherlands using structural models and natural experiments

“…Also, we compare the predictions of the structural model with results from a number of quasi-experimental studies on key past reforms and thus contribute to the growing body of literature that evaluates the performance of structural models by comparing simulated policy responses with the results from (quasi-)experimental studies (e.g. Attanasio et al 2011 ; Bargain and Doorley 2017 ; Brewer et al 2006 ; Cai et al 2008 ; Todd and Wolpin 2006 ; Geyer et al 2015 ; Hansen and Liu 2015 ; Pronzato 2015 ; Thoresen and Vatto 2015 ). In addition, because our structural model is fully integrated with a detailed tax-benefit calculator, we are able to study the effectiveness of various reform proposals, taking into account the budgetary effects of the behavioural responses to the reform.…”

“… 34 See, e.g. Attanasio et al, ( 2011 ); Bargain and Doorley, ( 2017 ); Brewer et al ( 2006 ); Cai et al( 2008 ); Todd and Wolpin ( 2006 ); Geyer et al ( 2015 ); Hansen and Liu ( 2015 ); Pronzato ( 2015 ); Thoresen and Vatto ( 2015 ). …”