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Human Well-being and In-Work Benefits: A Randomized Controlled Trial

Author

Listed:
  • Dorsett, Richard

    (University of Westminster)

  • Oswald, Andrew J.

    (University of Warwick)

Abstract
Many politicians believe they can intervene in the economy to improve people's lives. But can they? In a social experiment carried out in the United Kingdom, extensive in-work support was randomly assigned among 16,000 disadvantaged people. We follow a sub-sample of 3,500 single parents for 5 ensuing years. The results reveal a remarkable, and troubling, finding. Long after eligibility had ceased, the treated individuals had substantially lower psychological well-being, worried more about money, and were increasingly prone to debt. Thus helping people apparently hurt them. We discuss a behavioral framework consistent with our findings and reflect on implications for policy.

Suggested Citation

  • Dorsett, Richard & Oswald, Andrew J., 2014. "Human Well-being and In-Work Benefits: A Randomized Controlled Trial," IZA Discussion Papers 7943, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp7943
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Human Well-being and In-Work Benefits: A Randomized Controlled Trial
      by maximorossi in NEP-LTV blog on 2014-03-11 18:40:25

    Citations

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    Cited by:

    1. O'Donnell, Gus & Oswald, Andrew J., 2015. "National well-being policy and a weighted approach to human feelings," Ecological Economics, Elsevier, vol. 120(C), pages 59-70.
    2. Li, Liming & Avendano, Mauricio, 2023. "Lone parents' employment policy and adolescents’ socioemotional development: Quasi-experimental evidence from a UK reform," Social Science & Medicine, Elsevier, vol. 320(C).
    3. Hetschko, Clemens & Schöb, Ronnie & Wolf, Tobias, 2020. "Income support, employment transitions and well-being," Labour Economics, Elsevier, vol. 66(C).
    4. Bruno Van der Linden, 2021. "Do in-work benefits work for low-skilled workers?," IZA World of Labor, Institute of Labor Economics (IZA), pages 246-246, June.
    5. Boyd-Swan, Casey & Herbst, Chris M. & Ifcher, John & Zarghamee, Homa, 2016. "The earned income tax credit, mental health, and happiness," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 18-38.
    6. Wolf, Tobias & Hetschko, Clemens & Schöb, Ronnie, 2016. "Income Support, (Un-)Employment and Well-Being," VfS Annual Conference 2016 (Augsburg): Demographic Change 145860, Verein für Socialpolitik / German Economic Association.
    7. Dräger, Vanessa, 2015. "Do Employment Protection Reforms Affect Well-Being?," IZA Discussion Papers 9114, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    randomized controlled trials; government policy; in-work benefits; wage subsidies; well-being; happiness;
    All these keywords.

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D60 - Microeconomics - - Welfare Economics - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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