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Proceedings of the British Academy, Volume 1172001 Lectures$
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F.M.L. Thompson

Print publication date: 2003

Print ISBN-13: 9780197262795

Published to British Academy Scholarship Online: January 2013

DOI: 10.5871/bacad/9780197262795.001.0001

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Welfare-to-Work: Which Policies Work and Why?

Welfare-to-Work: Which Policies Work and Why?

KEYNES LECTURE IN ECONOMICS

Chapter:
(p.477) Welfare-to-Work: Which Policies Work and Why?
Source:
Proceedings of the British Academy, Volume 117
Author(s):

RICHARD BLUNDELL

Publisher:
British Academy
DOI:10.5871/bacad/9780197262795.003.0015

This chapter considers the arguments behind the expansion in welfare-to-work programmes that occurred over the last decade, and reviews the effectiveness of alternative approaches to enhancing labour-market attachment and earnings among the low skilled. It concerns the ‘iron triangle’ of welfare reform — that is the three, often conflicting, goals: raising the living standards of those on low incomes; encouraging work and economic self-sufficiency; and keeping government costs low. Section 2 considers the labour-market trends that stimulated the New Deal and Working Families Tax Credit (WFTC) reforms in the UK. Section 3 considers a number of central design features, focusing on time limits, means testing and implicit tax rates, minimum hours requirements, welfare receipt eligibility, and wage progression. This is done in the context of the design of the New Deal and of the WFTC. Section 4 moves on to evaluate specific aspects of the New Deal and WFTC reforms. Section 5 concludes with an overview of these schemes and their effectiveness, and an assessment of the appropriate design of welfare-to-work and make-work-pay programmes.

Keywords:   welfare policy, labour-market attachment, welfare reform, living standards, self-sufficiency, government costs, New Deal, Working Families Tax Credit, United Kingdom

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