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We estimate a dynamic structural model of labor supply, retirement, and informal care supply, incorporating labor market frictions and the German tax and benefit system. We find that in the absence of Germany's public long-term insurance scheme, informal elderly care has adverse and persistent effects on labor market outcomes and, thus, negatively affects lifetime earnings and future pension benefits. These consequences of caregiving are heterogeneous and depend on age, previous earnings, and institutional regulations. Policy simulations suggest that public long-term care insurance policies are fiscally costly and induce negative labor market effects. But we also show that they can offset the personal costs of caregiving to a large extent and increase welfare for those providing care, especially for low-income individuals.

Despite changing gender norms, few fathers decide to take parental leave after the birth of a child, and when they do, their leave spells are substantially shorter compared to mothers. This study examines how paternal leave-taking is affected by two key features of leave policies: flexibility in leave duration and financial incentives. To disentangle their impact, we exploit recent changes to the Austrian parental leave system, which initially offered flat monthly benefits for 36 months after childbirth. The first reform added considerably shorter leave options; the second reform introduced income-dependent benefits, increasing net income replacement rates to 80 percent. Using a regression discontinuity design based on eligibility cutoff dates, we find that both reforms had a strong impact on leave take-up of fathers. The availability of shorter leave options increased leave-taking by 23 percent, while the introduction of income-dependent benefits raised take-up by another 13 percent relative to pre-reform means. Despite these increases, the share of leave taken by fathers relative to mothers remained similar. Comparing the impact of the two reforms across different income groups, we conclude that higher flexibility is more effective than stronger financial compensation in raising the number of leave-taking fathers.

Using high-frequency Italian administrative data, the author studies the heterogeneous effects of a reform raising the normal retirement age (NRA) from 60 years to 65 years for private-sector male employees. The analysis, based on a difference-in-differences (DD) method, shows that the NRA raise reduces pension benefit claims but does not lead to a one-to-one increase in the employment rate since workers also apply for more disability and unemployment benefits. Moreover, most of them simply retire without any benefit. The extent of the effects varies substantially across socio-economic groups, as individuals with poorer health, with lower occupational grades and lower pay levels are the most constrained by the reform, experiencing the highest delay in pension claims, increase in employment, and inactivity. All in all, this paper shows that raising the NRA could have unintended effects as it affects more negatively the most vulnerable in the labor market.

Work impairment is an increasing concern in advanced economies, particularly among young people. Activation, rather than passively providing economic support, is often regarded as the preferred strategy for addressing this issue. However, little is known about which measures are effective for improving youth work impairment. A hazard rate competing risk model with unobserved heterogeneity applied to rich Norwegian panel data provides some insights. Wage subsidies, and to some extent education/training programs, have the intended effect. In other words, work-impaired youths who participate in these measures have a higher probability of obtaining work/starting an education and a lower probability of experiencing a transition to social security than those youths who do not participate in any measure. The impacts of follow-up initiatives and work practice programs are more mixed.

The Earned Income Tax Credit (EITC) is one of the largest anti-poverty programs in the United States, providing over $67 billion to more than 27 million families for the tax year 2016, an average of $2,455. By subsidizing the earnings of low-income workers, the EITC reduces poverty both directly through the credit itself and indirectly through labor supply incentives. The two primary determinants of the amount a tax unit receives are earned income and number of children. Many studies define eligibility based on the presence of children in a household and separate analyses by marital status, a reflection of the fundamentally different incentives the EITC poses for single- and dual-earner households. However, as the EITC theoretically encourages fertility and generally discourages marriage, endogenous responses along these two dimensions could bias estimates which rely on them for identification and sample selection. In this paper, I revisit the classic question of the EITC’s labor market effects while exploiting a source of arguably exogenous variation in EITC receipt that does not rely on these potentially endogenous characteristics: birth timing around the end of the calendar year. Using the Survey of Income and Program Participation, my results show positive earnings and employment effects for unmarried women in the 12 months following their first/only child’s birth, including for those with a high school degree or less (low-ed). Overall, the results are usually small and insignificant for married women, with the exception of negative (and sometimes significant) effects on earnings for low-ed married women. Using a difference-in-discontinuities approach, I separate the income effect of the credit itself from the information effect, which, I argue, occurs when women receive the EITC for the first time. I show that, while the income effect is negative across all groups of women, the information effects are positive for unmarried women and negative for married women, again consistent with theory and the body of evidence on the EITC.

This paper exploits variation resulting from a series of federal and state Medicaid expansions between 1979 and 2014 to estimate the effects of child's access to public health insurance on labor market outcomes of parents. The results imply that extended Medicaid eligibility of children leads to positive contemporaneous labor supply responses of both parents. The estimated effects are concentrated among mothers with non-white children and fathers with white children.

We examine the multigenerational impacts of a nationwide social pension program in China, the New Rural Pension Scheme (NRPS). NRPS was rolled out in full scale since 2012, and rural enrollees over age 60 are eligible to receive a minimum of 70 CNY non-contributory monthly pension. We leverage age eligibility and variations in pension receipt to identify the inter-generational effect of NRPS on health among grandchildren. We find NRPS substantially increases child weight without impacting height. Overall, child BMI z score increases by 1.09, which is largely driven by grandfathers' pension receipt raising rates of overweight and obesity among grandsons. Among the potential mechanisms, our findings are more plausibly explained by a mixture of income effect, son preference, and rising inter-generational co-residence and childcare.

In most disability insurance programs, beneficiaries lose some or all of their benefits if they earn above an earnings threshold. While intended to screen out applicants with high remaining working capacity, earnings limits can also distort the labor supply of beneficiaries. This paper develops a simple framework to evaluate this trade-off. It uses a reduction in the earnings limit in Hungary to examine screening and labor supply responses. The findings show that the policy changed selection into the program modestly, but it reduced labor supply significantly. Viewed through the lens of the model, these findings suggest that the earnings threshold should be higher.

We study the impact of grandparental retirement decisions on family members' labor supply and child outcomes by exploiting a Dutch pension reform in a fuzzy Regression Discontinuity design. A one-hour increase in grandmothers' hours worked causes adult daughters with young children to work half an hour less. Daughters without children, with older children and sons/daughters-in-law are not affected. We show important long-run impacts on maternal labor supply and on the child penalty. Test score effects are positive for children aged 4-7 (substitution from grandparental to maternal care), and negative for children aged 11-12 (substitution from grandparental to formal childcare).

We examine the living standards and health of working-age disabled people and disability benefits recipients over time in the UK. The UK's disability benefits system (which is non-means-tested and in which receipt is unrelated to work status) has gone through a significant transformation since 2013 with the gradual replacement of the disability living allowance (DLA) with the personal independence payment (PIP). We establish four key facts. First, 6% of working-age individuals are now on disability benefits, up from 2% in 1992-93. This rise has been driven by claims for mental health and other psychiatric conditions, which are now the main disabling condition for 44% of claimants (27% back in 2002-03). Second, almost half of those in the most materially deprived tenth of the population are disabled, but most of that group do not receive disability benefits. Third, over the period that DLA has been replaced by PIP, a larger fraction of those with the poorest health have started to receive disability benefits, suggesting that the targeting of the benefits has improved on this margin. Fourth, simple event studies examining employment in the years around the reduction of disability benefits (following a government health reassessment) find no change before but a sharp (4 percentage point) rise immediately after loss of benefits, which grows to 10ppts four years after. This is not enough to offset the loss in income on average, and income poverty rises 10ppts in the year following the reduction. Nonetheless, we find limited evidence of claimants' own assessment of their financial situation changing, suggesting that the benefits are removed at a time when they are less needed.

In the last 15 years before the COVID-19 crisis, Germany has experienced a strong and continuous increase in employment - the ‘German job miracle’. During this period, income inequality, which had previously increased sharply, remained relatively stable. This paper analyzes the impact of employment changes on disposable income inequality between 2004 and 2015 and gives an answer to the question why inequality remained constant despite the dramatic increase in employment. It is the first study to examine the effect of changing labor supply patterns due to changes in policies, wages and preferences, as well as the role that labor market constraints have played for inequality of disposable income. It finds that inequality would have increased further due to a transforming population structure, but increasing employment and policy changes almost completely offset this development. The results show that employment growth due to the reduction of labor market constraints has been more important in slowing down the increase in inequality than changes in labor supply., IAB-Discussion Paper

This paper investigates the effect of a unique child labor ban regulation on employment and school enrollment. The ban implemented in Mexico in 2015, increased the minimum working age from 14 to 15, introduced restrictions to employ underage individuals, and imposed penalties for the violation of the law. Our identification strategy relies on a DiD approach that exploits the date of birth as a natural cutoff to assign individuals into treatment and control groups. The ban led to a decrease in the probability to work by 1.2 percentage points and an increase in the probability of being enrolled in school by 2.2 percentage points for the treatment group. These results are driven by a reduction in employment in paid activities, and in the secondary and tertiary sectors. The effects are persistent several years after the ban. Dieses Papier untersucht die Auswirkungen eines Verbots von Kinderarbeit in Mexiko auf die Wahrscheinlichkeiten der Einschulung und Beschäftigung von Kindern. Das 2015 eingeführte Verbot hob das Mindestalter für die Ausübung von Erwerbstätigkeiten von 14 auf 15 Jahre an, führte Beschränkungen für die Beschäftigung Minderjähriger ein und setzte Strafen für Missachtungen dieser Regeln fest. Die Identifizierungsstrategie basiert auf einem DiD-Ansatz für den Behandlungs- und Kontrollgruppen anhand des Geburtsdatums gebildet werden. Die Ergebnisse zeigen, dass das Verbot von Kinderarbeit die Wahrscheinlichkeit zu arbeiten um 1,2 Prozentpunkte reduzierte und die Wahrscheinlichkeit eines Schulbesuchs um 2,2 Prozentpunkte erhöhte. Insbesondere sank die Ausübung von bezahlten Tätigkeiten sowie im sekundären und tertiären Sektor. Diese Effekte sind auch noch mehrere Jahre nach Einführung des Verbots von Kinderarbeit festzustellen.

Silvio Daidone is a economist and Benjamin Davis is a Strategic Program Leader, both with the Food and Agriculture Organization of the United Nations, Rome, Italy. Sudhanshu Handa is a professor at the University of North Carolina at Chapel Hill. Paul Winters is the Associate Vice-President of the Strategy and Knowledge Department, International Fund for Agricultural Development, Rome, Italy. The research presented in this article has been carried out under the auspices of the "From Protection to Production" (PtoP) project, a collaborative effort of the United Nations Children's Fund, the United Kingdom Department for International Development (DFID) and the Food and Agriculture Organization of the United Nations (FAO). The project has received funding from the DFID Research and Evidence Division, the European Union through the "Improved Global Governance for Hunger Reduction Programme", and the FAO Regular Fund. The authors would like to thank the following: two anonymous reviewers and the journal editor, who have provided excellent comments and significantly contributed to the improvement of the article; Alejandro Grinspun, Fabio Veras Soares, and Marco Knowles for technical review of previous drafts; Ervin Prifti and Noemi Pace for their useful suggestions and comments. The authors are also grateful to participants at the following conferences and workshops: 2017 APPAM International Conference, Brussels; 2016 Transfer Project workshop, Addis Ababa; 2016 IFAD-3IE Designing and implementing high-quality, policy-relevant impact evaluations, Rome; 2015 SASPEN Conference on Social Protection, Johannesburg; 2015 Global Food Security Conference, Ithaca; 2014 IPEA International Seminar "Social protection, entrepreneurship and labor market activation - Evidence for better policies", Brasilia; 2014 University of Florence, Department of Economics & Management Seminars, Florence; 2014 Africa Community of Practice (CoP) on Conditional Cash Transfers and Cash Transfers; 2014 African Union Expert Consultation on Children and Social Protection Systems, Cape Town; 2014 IDS Graduation and Social Protection Conference, Kigali. The authors would also like to remember Josh Dewbre, a founding member of the PtoP team, who passed away in April 2015, who had participated in the fieldwork and in the analysis of several programs included in this study. All mistakes and omissions are those of the authors.

This paper analyzes the relationship between work-promoting policies and child development. First, we provide new comprehensive evidence of the unintended consequences for child development of the Earned Income Tax Credit expansions during the 1990s in the United States. Second, our theory-driven empirical model reconciles this result by shedding light on the trade-off between the income effect (economic resources) and the substitution effect (time and quality of the parent-child interactions) on a child's cognitive and behavioral development. This money versus time trade-off is most pronounced for disadvantaged mothers. Overall, our results call for a policy debate on how to design targeted supplements for disadvantaged families to support working mothers and their children. Revised version, February 2021

We investigate the role of employment in explaining changes in the mental health of single mothers compared to partnered mothers and single childless women during the period of welfare reform in the UK. We employ a time allocation framework to explore if reductions in benefit income led to a sub-optimal consumption bundle, resulting in lower in mental health, higher employment, and longer working hours. We estimate a Heckman selection model for employment and hours worked. A difference-in-difference model is used to explore if reform periods were associated with increased inequalities. Results show that employment was associated with better mental health for all women. Higher job hours were associated with lower mental health for all women but the association was not statistically significant for single mothers. Mental health inequalities potentially have increased post reforms.

The Income Maintenance Experiments have received renewed attention due to growing international interest in a Basic Income. Proponents viewed a Negative Income Tax as a replacement for traditional welfare with stronger work incentives and reduced poverty. However, existing labor supply estimates for single parents are uniformly negative. We reassess the experimental evidence and find randomization failure in two NITs (Gary and Seattle). In Denver and Manitoba, we find a positive labor supply response for those on welfare prior to random assignment. Our results provide strong evidence that a NIT can increase work activity among single parents on welfare.

We study the effect of lower unearned income on labor supply. To identify the causal effect of an unexpected reduction in unearned income, we exploit a policy reform that lowered survivor pensions in Austria. Men widowed after the survivor pension reform received an approximately 34% lower survivor pension than men widowed before the reform. We follow the employment history of both groups for 150 months and estimate the reform's effect on labor supply using a regression discontinuity design. The effect of the lower pension is evident immediately after the death of their spouse, is persistent over time, becomes more pronounced over time, and is robust across model specifications. Our baseline result suggests a 3.5 to 5.4 percentage point higher employment rate for survivors in the low pension regime in the long run. The estimated effect corresponds to a labor supply elasticity at the extensive margin with respect to the changes in total income of about -0.9 to -1.3.

We explore how access to Head Start impacts maternal labor supply. By relaxing child care constraints, public preschool options like Head Start might lead mothers to reallocate time between employment, child care, and other activities. Using the 1990s enrollment and funding expansions and the 2002 Head Start Impact Study randomized control trial, we show that Head Start increases short-run employment and wage earnings of single mothers. The increase in labor supply does not appear to reduce quality parent-child interactions. Viewing Head Start as a bundle of family-level treatments can shed new light on the impacts of the program beyond children.

In 2016, the Polish government introduced a large child benefit, called “Family 500+”, with the aim to increase fertility and reduce child poverty. It is universal for the second and every further child and means-tested for the first child. We study the impact of the new benefit on female labor supply, using Labor Force Survey data. Based on a difference-in-differences methodology, we find that the labor market participation rates of women with children decreased after the introduction of the benefit compared to that of childless women. The labor force participation rate of mothers showed a drop of 2–3 percentage points by mid-2017 as a result of the “Family 500+” program. The effect was higher among women with lower levels of education and among women living in small towns.

On September 1, 2014, Georgia enacted a one-time, immediate policy shifting public office working hours from 10:00-19:00 to 9:00-18:00 and affected the work schedules of all subjected employees. Due to professional scheduling conflicts faced by women with household responsibilities, some members of parliament believed that the new hours may be "family friendly", i.e. convenient for combining career and household activities, and increase female labor participation. The policy affected approximately 200,000 employees, but had never been evaluated, nor had any similar policy in any economic literature. Given that the policy did not affect the private sector, we employed a difference-in-differences approach using the National Statistics Office of Georgia Households Incomes and Expenditures Survey from 2013 - 2016. We find that the policy did not lead to more women working in the public sector, but did end up leading to an increase in female working hours. It was not through the expected channel, but rather through the taking up of the reduced working hours of employees with children that had been working over 40 hours, especially by married women without children, followed by unmarried without children, and by part-time employees with children. Effectively, the policy directly reduced the engagement of full-time employees with children and slightly increased the engagement of part-time employees with children. It did not directly increase female labor participation. As male working hour engagement was most negatively affected and those hours were mostly taken up by females, it could be argued that the policy did, indirectly, have a positive impact on gender equality in the labor market and, possibly, even domestically.

The present pandemic covid-19 has changed the world in all the dimension of the human life. It has also changed the views of all discipline from individual attitude towards his health to the international trade. The life during the lockdown is an unforgettable experience to almost all in the world by creating defences in every walk of life for the survival. The time taken by the researched and scientist across the globe to invent the vaccine and its issues related to the general acceptability claimed the lives of many millions across the continents and still in the questions of how long will it take us in this journey. Everything is a product in economics. When there is global demand for the vaccine for the virus, how global market failed to provide it on time. This compels to make an enquiry into how the world market failed to react with appropriate vaccine invention and what theories are working in background for the present situation and how long will the world would be like this. What economic theories can be applied to make a solution under what constraints? There are very few attempts are only available on the interlink ages of this global market failure and the causes, policy remedies both at the gross root as well as at the macro level. In this context this paper is attempted to probe into this issue and fill the gap in research. Using the graphical approach first we have used the asymmetric information model for the accuses of market failure and then probed it towards the information's asymmetries and discover the combined impact on the Covid 19 policy response. Disclaimer: The views appeared in the works are of the authors only. In no way it reflects the institutions in which they belong to.

This paper examines a broad set of short- and long-term impacts of Individual Placement and Support (IPS) for disability benefit recipients with severe mental disabilities. IPS is a specific intervention that first aims to place an individual in employment and subsequently trains the worker on the job. We compare the outcomes for IPS-recipients to a control group that received traditional vocational rehabilitation (TVR) services. We use administrative data to apply difference-in-difference estimation on a matched sample of 513 IPS recipients and almost 23,000 TVR-recipients in the Netherlands. Our results show that from six months after the start of the treatment onwards employment probabilities of IPS participants significantly outperform those of TVR participants. The higher probability to be in competitive employment does not come at the expense of fewer work in sheltered employment or trial periods. Nor do they come at the expense of shorter working hours or lower wages. The share of people on disability benefits declines equally in both group for quite some time after the start of the intervention but there is some indication that the benefit dependency in the long run declines faster for IPS recipients. Effects regarding medical costs are not statistically significant.

Parents spend considerable time and resources investing in their children's development. Given evidence that the Earned Income Tax Credit (EITC) affects maternal labor supply, we investigate how the EITC affects a broad array of time-use activities, focusing on the amount and nature of time spent with children. Using 2003-2018 time-use data, we find that federal and state EITC expansions increase maternal work time, which reduces time devoted to home production, leisure, and time with children. However, for children of all ages, almost none of the reduction comes from time devoted to investment activities, such as active learning and development activities.

The Earned Income Tax Credit (EITC) is the cornerstone U.S. anti-poverty program, typically lifting over 5 million children out of poverty each year. Targeted to low-income households with children, and only available to those who work, the EITC contains strong incentives for non-workers to become employed. Most of the existing economics literature focuses on federal EITC expansions in the 1980s and 1990s. This paper takes a longer view, studying all federal expansions since the program's inception in 1975. We find robust evidence that EITC expansions increase the extensive margin of labor supply.

Using an original administrative dataset in the context of a scarcity induced-natural experi-ment in New York City, I find that families placed in shelters in their neighborhoods of origin remain there considerably longer than those assigned to distant shelters. Locally-placed families also access more public benefits and are more apt to work. A fixed effects model assessing multi-spell families confirms these main results. Complementary instrumental variable and regression discontinuity designs exploiting policy shocks and rules, respectively, suggest difficult-to-place families – such as those that are large, disconnected from services, or from neighborhoods where homelessness is common – are especially sensitive to proxi-mate placements. Better targeting through improved screening at intake can enhance pro-gram efficiency. The practice of assigning shelter based on chance vacancies ought to be replaced with a system of evidence-based placements tailored to families' resources and constraints.

Most countries around the world implement some form of a safety net program for poor households. A widespread concern is that such programs crowd out private-sector jobs. But they could also improve workers' welfare by allowing them to take on more risk, for example through self-employment. This paper analyzes the employment impacts of the world's largest public-works program using a novel regression-discontinuity design. The analysis exploits detailed institutional information to describe the allocation formula of the program and to construct a benefit calculator that predicts early and late treatment of districts. The results show that there is little evidence of a crowding out of private-sector jobs. Instead, the scheme functions as a safety net after a bad rainfall shock. Male workers also take on more risk by moving into family employment. This self-revealed preference for a different type of job suggests other potential benefits of safety net programs which so far have received little attention in the literature.