This paper models welfare-to-work programs as contracts offered by the principal/government to unemployed agents in an environment with moral hazard. A welfare-to-work program comprises of several policy instruments (e.g., job-search, assisted search, mandated work) the principal can use, in combination with welfare benefits, in order to minimize the costs of delivering promised utility to the agent. The generosity of the program and the skill level of the unemployed agent determine the optimal policy instrument to be implemented. Restricting attention to ‘soft programs’ — contracts that make no use of punishments or sanctions — allows a fully analytical characterization of the optimal program and, in addition, it makes the solution robust to hidden saving.
The design of 'soft' welfare-to-work programs
PAVONI, NICOLA;
2016
Abstract
This paper models welfare-to-work programs as contracts offered by the principal/government to unemployed agents in an environment with moral hazard. A welfare-to-work program comprises of several policy instruments (e.g., job-search, assisted search, mandated work) the principal can use, in combination with welfare benefits, in order to minimize the costs of delivering promised utility to the agent. The generosity of the program and the skill level of the unemployed agent determine the optimal policy instrument to be implemented. Restricting attention to ‘soft programs’ — contracts that make no use of punishments or sanctions — allows a fully analytical characterization of the optimal program and, in addition, it makes the solution robust to hidden saving.File | Dimensione | Formato | |
---|---|---|---|
RED_final.pdf
non disponibili
Tipologia:
Documento in Pre-print (Pre-print document)
Licenza:
NON PUBBLICO - Accesso privato/ristretto
Dimensione
505.84 kB
Formato
Adobe PDF
|
505.84 kB | Adobe PDF | Visualizza/Apri |
lettere accettazione_RED.pdf
non disponibili
Tipologia:
Altro materiale allegato
Licenza:
NON PUBBLICO - Accesso privato/ristretto
Dimensione
127.47 kB
Formato
Adobe PDF
|
127.47 kB | Adobe PDF | Visualizza/Apri |
Soft_WTW.pdf
non disponibili
Descrizione: Articolo
Tipologia:
Pdf editoriale (Publisher's layout)
Licenza:
NON PUBBLICO - Accesso privato/ristretto
Dimensione
1.35 MB
Formato
Adobe PDF
|
1.35 MB | Adobe PDF | Visualizza/Apri |
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.