Assesing the impact of public policies on labor market and poverty

Abstract

This PhD thesis evaluates the direct and indirect effects of two economic policies. The aim of the first chapter is to evaluate the family friendly law (Act 39/99) approved in Spain in 1999, which grants parents the right to reduce work-time schedule for childcare issues. We find an increase of work-time reduction by around 18%. Second, we find that employers restrict indefinite contracts to potential users of the law to limit its use. Furthermore, we find that in the recent downturn the use of the law decreased by around 13% compared to the previous economic upturn. The second and the third chapters assess the impact of a Minimum Income Scheme (MIS), which has been operating in the Basque Country, one of Spain¿s 17 regions, for more than twenty years. In particular, in the second chapter, its impact, effectiveness and efficiency in fighting poverty is assessed. Results show that MIS has had a strong impact in reducing all dimensions of poverty. However, only 59.2% of the benefit transferred effectively contributes to poverty reduction. The paper presents an alternative, more egalitarian design of the Minimum Income Scheme, which, in line with an international standard of poverty, seeks to maximize its coverage and its impact in reducing poverty. Finally, the third chapter assesses whether the policy delays entry into employment for recipients. In addition, we test the efficacy of active policies aimed at enabling recipients of the MIS to re-enter employment. Our results indicate that on average the Minimum Income Scheme, in addition to preventing social exclusion by providing financial support, does not delay entry into employment. However, the impact differs from one demographic group to another. Furthermore, Active Labor Market Policies designed for this group, in particular training, have a strong positive impact on finding a new job.