Logo
Munich Personal RePEc Archive

Welfare Spending in the Long Run

Divounguy Nding, Orphe (2015): Welfare Spending in the Long Run.

Warning
There is a more recent version of this item available.
[thumbnail of MPRA_paper_68446.pdf]
Preview
PDF
MPRA_paper_68446.pdf

Download (154kB) | Preview

Abstract

In this paper,we construct an equilibrium search model of the labor market augmented to include lump sum taxes that finance government expenditures. Using the model, we can decompose the decline in labor force participation (LFP) into the policy effect and that of other factors such as declining economic output. Using census data for the state of Ohio, we learn that declining LFP and the increase in public assistance spending were caused by weaker economic output that led to an increase in the claimant count. Our results indicate that if the economy resembled the pre-crisis period, the Kasich administration would have led to an increase in LFP of approximately 0.6 percentage points. This effect goes up to 2% if all inactive workers are assumed to claim welfare income.

Available Versions of this Item

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.