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Choosing to become a 'lost cause': the perverse effects of benefit preconditions

Farrell, Lisa & Frijters, Paul (2008) Choosing to become a 'lost cause': the perverse effects of benefit preconditions. Oxford Economic Papers, 60(1), pp. 1-19.

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Abstract

This paper argues that preconditions for welfare benefit entitlements based on labour market prospects can be counterproductive when they create an incentive for individuals to abstain from any investment earlier in life that could improve future prospects. Benefit entitlements based partly on investments made prior to labour market entry are then Pareto-improving.

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ID Code: 30818
Item Type: Journal Article
Keywords: Benefits, Unemployment, Schooling, Optimal Welfare, Incentives
DOI: 10.1093/oep/gpm017
ISSN: 0030-7653
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200) > Labour Economics (140211)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Copyright Owner: Oxford University Press
Deposited On: 12 Feb 2010 22:48
Last Modified: 29 Feb 2012 23:43

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