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• W1533762108 abstract "Some existing welfare programs (“work-first”) require part icipants to work in exchange for benefits. Others (“job search-first”) emphasize p rivate job-search and provide assistance in finding and retaining a durable employ ment. This paper studies the optimal design of welfare programs when (i) the principal/government is unable to observe the agent’s effort, but can assist the agent’s job search and can mandate the agent to work, and (ii) agents’ skills depreciate during une mployment. In the optimal welfare program, assisted search is implemented between an initial spell of private search (unemployment insurance) and a final spell of pure inc ome support where search effort is not elicited. To be effective, job-search a ssistance requires large reemployment subsidies. The optimal program features compulsory work activities for low levels of program’s generosity (i.e., its promised u tility or available budget). The threat of mandatory work acts like a punishment that facilitates the provision of search incentives without compromising consumption smoothing too much." @default.
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• W1533762108 date "2013-01-01" @default.
• W1533762108 modified "2023-10-11" @default.
• W1533762108 title "Search and Work in Optimal Welfare Programs" @default.
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• W1533762108 doi "https://doi.org/10.3386/w18666" @default.
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