The adoption of in-work benefit programs: an exploration on international experiences

摘要: With the pioneering success of In-Work-Benefit (IWB) programs in the UK (1971) and the US (1975), the programs have been gradually disseminated across countries. Previous studies review and compare descriptive features of the programs in selected economies, together with a few cases of non-adoption (for example, Germany versus the UK). We extend the literature by empirically searching for economic variables favorable to the IWB adoption across 103 countries from 1980-2006. Our findings suggest that good macroeconomic conditions tend to precede the adoption, subject to country-specific structural constraints and program features (refundability and assessment unit). Ranked by economic significance, the probability of IWB adoption increases with higher capita GDP, lower age dependency, lower GINI coefficient, higher unemployment rate, higher budget balance, and higher labor force participation. We also examine the role of tax base, subsidies, labor supply, and wages. After comparing countries with similar structural and macroeconomic environments, we conjecture that the prevailing non-adoption can be attributed to hard-to-measure influences, particularly social attitude towards inequality, bureaucratic quality and political tendency (ie liberal or conservative) of the government.