Incentive effects of social assistance
Subtitle: A regression discontinuity approach
By: Thomas Lemieux, Kevin Milligan.
Contributors: Milligan, Kevin.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10541; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10541.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Transfer payments -- Québec (Province); Public welfare -- Québec (Province)
Description: "We examine the incentive effects of transfer programs using a unique policy episode.  Prior to 1989, social assistance recipients without children in Quebec who were under age 30 received benefits 60 percent lower than recipients older than 30.  We use this sharp discontinuity in policy to estimate the effects of social assistance on various labour market outcomes and on living arrangements using a regression discontinuity approach.  We find strong evidence that more generous social assistance benefits reduce employment, and more suggestive evidence that they affect marital status and living arrangements.  The regression discontinuity estimates exhibit little sensitivity to the degree of flexibility in the specification, and perform very well when we control for unobserved heterogeneity using a first difference specification.  Finally, we show that commonly used difference-in-difference estimators may perform poorly when control groups are inappropriately chosen"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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