Welfare persistence is estimated and compared between Swedish-born and foreign-born households during the 1990s. This is done within the framework of a dynamic discrete choice model controlling for the initial condition and permanent unobserved heterogeneity. We control for three types of persistence in terms of observed and unobserved heterogeneity, serial correlation, and structural state dep...

Supporters of recent welfare reforms argue that time limits and other eligibility restrictions serve recipients. We present a simple model of agents with present-biased preferences to investigate the theoretical validity of this claim. We first identify four types of outcome that describe the behavior of a present-biased agent in the absence of time limits. We then show that the behavioral cons...

Tax credits have been a popular way to alleviate in-work poverty. The assumption is typically that the incidence is on the claimant workers. However, economic theory suggests no particular reason to believe that this should be the case. This paper investigates the incidence of the Working Families’Tax Credit in the UK introduced in 1999, which unlike similar tax credit policies was paid through...

Welfare Participation by Immigrants in the UK Welfare participation is an important indicator of how successfully immigrants perform in the host country. This paper examines this issue for the UK, which has experienced a large growth in its immigrant flows and population levels in recent years, especially following EU enlargement in 2004. The analysis focuses in particular on the types of benef...

Individuals with disabilities face greater challenges in the labor market than able-bodied individuals and a growing body of research is finding that their children also tend to have more developmental problems than the children of able-bodied parents. Can transfer payments help reduce this gap? In this paper, we present the first evidence on how parental disability benefits affect the well-bei...

This paper studies the Homeowner Affordability Modification Program (HAMP), a 2009 federal program reducing delinquent homeowners mortgage payments to 31 percent of monthly income. To assess the program I propose and estimate a structural model of mortgage default using program results. The model allows for income, house prices, and exit preference shocks to induce default, and allows homeowner...

Can Mistargeting Destroy Social Capital and Stimulate Crime? Evidence from a Cash Transfer Program in Indonesia Cash transfer programs can provide important financial support for poor households in developing countries and are becoming increasingly common. However the potential for mistargeting of program funds is high. This paper focuses on the social consequences arising from misallocation of...

Is Partisan Alignment Electorally Rewarding? Evidence from Village Council Elections in India* Do ruling parties positively discriminate in favour of their own constituencies in allocating public resources? If they do, do they gain electorally in engaging in such a practice? This paper tests whether partisan alignment exists in the allocation of funds for India’s largest social protection progr...

Identifying the effect of the financial incentives created by social security systems on the retirement behaviour of individuals requires exogenous variation in program parameters. In this paper we study the 1993 Australian Age Pension reform which increased the eligibility age for women to access the social security benefit. We find economically significant responses to the increase in the Age...

We consider a life-cycle model with idiosyncratic risk in earnings, out-of-pocket medical and nursing home expenses, and survival. Partial insurance is available through welfare, Medicaid, and social security. Calibrating the model to the United States we show that savings for old-age, out-of-pocket expenses account for 13.5 percent of aggregate wealth, half of which is due to nursing home expe...