In-work benefits for low-wage jobs. Can additional income reduce employment stability?

Journal article


Publication Details

Author(s): Krug G
Journal: European Sociological Review
Publisher: Oxford University Press (OUP): Policy F - Oxford Open Option D
Publication year: 2009
Volume: 25
Journal issue: 4
Pages range: 459-474
ISSN: 0266-7215


Abstract


In-work benefits, which provide financial supplements to employees in low-wage jobs, are an instrument of active labour market policy used to encourage the labour market integration of low-skilled workers and the long-term unemployed. This paper argues that although government subsidies increase overall wages, employees interpret them as a signal that employers are unwilling to behave according to the norm of reciprocity. This leads to negative side-effects on employment stability, counteracting the positive effects of additional income on employment stability. The present article tests these hypotheses using a survey of in-work benefit recipients, with non-recipients as a comparison group. The method of propensity score matching is applied to eliminate all compositional differences between benefit recipients and non-recipients except for the source of their income. It is shown that in-work benefits lead to perceived violations of reciprocity. However, whether this explains why in-work benefits are not successful in promoting employment stability remains an open question.



FAU Authors / FAU Editors

Krug, Gerhard Dr.
Lehrstuhl für Empirische Wirtschaftssoziologie


How to cite

APA:
Krug, G. (2009). In-work benefits for low-wage jobs. Can additional income reduce employment stability? European Sociological Review, 25(4), 459-474. https://dx.doi.org/10.1093/esr/jcn062

MLA:
Krug, Gerhard. "In-work benefits for low-wage jobs. Can additional income reduce employment stability?" European Sociological Review 25.4 (2009): 459-474.

BibTeX: 

Last updated on 2018-07-08 at 11:53