Social Employment of Welfare Recipients in Belgium: An Evaluation

Cockx, Bart; Ridder, Geert
April 2001
Economic Journal;Apr2001, Vol. 111 Issue 470
Academic Journal
In Belgium, welfare agencies receive a subsidy to employ welfare recipients for a period sufficiently long to entitle them to unemployment benefits. We investigate the effect of this programme on the exit rate from welfare. We propose a grouping/IV estimator of the programme effect that eliminates selection bias. The estimator is consistent, even if the selection into the programme depends on the average unobserved characteristics of welfare recipients in a region and in a welfare duration interval. Without correction for selectivity we find that the programme reduces welfare dependence, but after correction this conclusion is reversed.


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