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Determinants of leaving the social assistance scheme in Belgium
Sarah CarpentierHerman Deleeck Centre for Social Policy Antwerp UniversityRECWOWE/ Equalsoc Doctoral Research Workshop – Tilburg 19-20 November 2009
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1. Research question2. Literature3. The Belgian social assistance scheme 4. Hypotheses5. Data 6. Methodology7. Evidence8. Conclusion
Outline
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1. Research question
• Which are the determinants of leaving the minimum income scheme? Does it matter which welfare agency administers the benefit?
• Interplay between individual heterogeneity, socio-economic context and institutions on individual outcomes= a black box
• Equal access to social rights in different places
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• Several explanations for individual variation in duration - Individual characteristics (heterogeneity)
Social assistance recipients differ in their individual & household characteristics and their probability of exit
- Welfare dependency
time on welfare as such decreases the probability of leaving
- Labour market situation Time on welfare varies according to qualities of the labour market
2. Literature
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- Institutional effectTime on welfare influenced by variability in institutional design (national and local policy mix)
- generosity - activation policy
• Rational choice perspective includes all types of explanations
2. Literature
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• Overall social protection scheme - flat-rate unemployment benefit for
school leavers after a waiting period- Unemployment benefit in principle unlimited
in time- Other categorical social assistance schemes
(for elderly, handicapped persons, and children) Low % of social assistance beneficiariesin European perspective (0.8% in 2004)
3. The Belgian social assistance scheme
Percentage of adults claiming social assistance by municipality (2004)
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• Social assistance scheme- Eligibility criteria
• 18 years old (except when pregnant/married)• Belgium nationality/legal residency & living in
Belgium• Needy according to a family-based means test• Available for work (exempt when exempted)
- Unlimited in time
3. The Belgian social assistance scheme
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- Decentralised organisation (since 1974)• National statutory framework
- Social assistance benefit receipt- Activation policy: positive & negative incentives
• Local agencies (‘OCMW’/ ‘CPAS’) - Administer federal law with a broad autonomy &
margin of appreciation - Take supplementary initiatives according to own
insight & to local needs to ensure human dignityModerate decentralisation in European perspectivemain areas of local competence: generosity, allocation to training and activation programmes, availability for work assessment
3. The Belgian social assistance scheme
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4. Hypotheses
• Hypotheses on individual characteristics - longer duration for formerly low work
intensity - longer duration for women with children - non-linear relation for age- No clear hypotheses for civil status and
non-linear relationship• Hypothesis on time
- Negative duration dependency (non-linear relation)
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3. Literature
• Hypotheses on municipality characteristics - Longer welfare spells in a less favourable
socio-economic context- More generous, longer duration- Higher employment programme
participation rate, shorter duration
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• Administrative payment records - Data Warehouse Labour Market and Social Security
• 1/3 proportionally stratified sample of 2004 cohort entrants (N=5174) in 505 welfare agencies aged between 25 and 55 who were not entitled for at least one year and a quarter before entry in social assistance
• Observation window of 36 months, monthly recorded data
• Linked with some municipality level data from various sources
5. Data
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• Welfare agencies administer from 1 to 444 persons in our sample On average 10 persons
• Sample characteristics - individuals- 55% women - More than 40% is younger than 35- 42% has another nationality at birth - 58% couples with/without children, 23% singles- Nearly 50% is married- Mean work intensity over past five years is 34%- 21% in Brussels, 35% in Wallonia, 43% in Flanders- 28% lives in big cities- 76% has only one episode, 18% has 2 episodes
5. Data
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• Sample characteristics - municipalities- Mean unemployment rate: 10% (range: 4-38%)- Mean yearly amount of supplementary benefit
per beneficiary: 1760 € (range: 0-9680€)- Mean social employment participation rate: 13%
(range 0-50%)
5. Data
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• Multilevel event history analysis accounts for - Dependency of observations (clustering)- Unobserved heterogeneity (! Spuriousness)- Unbalanced design - Timing of events- Censoring
• Observing recurrent episodes• Combinations with unemployment benefit or
working are allowed at entry • Event: leaving the minimum income scheme
- Unspecified exit - Participation in activation programme =exit
6. Methodology
Spell1
l
Spell2
Welfare agency 2
Person 1
Spell1
Person 3
Spell1 Spell1
Person 2 Person 1
Spell2
Welfare agency 1
Person 2
Spell1
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• Strict hierarchies (no cross-classification)- Unique nesting of spells in persons- Unique nesting of persons in welfare agencies
• No time-varying covariates for both individual and municipality levelcharacteristics at entry time
• Discrete-time framework - Monthly recorded data, though underlying process
is continuous- Appropriate for multilevel event history analysis
Logit regression of binary response
6. Methodology
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• Modelling with Mlwin 2.13• MCMC estimation (= Markov Chain Monte Carlo)• Comparison of nested models by the deviance
information criterium (DIC)
6. Methodology
Declining baseline hazard rate for multiple episodes
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7. Evidence
• Nulmodel (empty random intercept): - Probability of leaving differs significantly between
welfare agencies- Only 5% of variability is situated at municipality
level
(= theoretical approximation)
Logit for odds of leavingFixed Part Estimate SE cons -1.598 0.073 Time -0.035 0.006 Individual socio-economic characteristics Age -0.023 0.002 Man 0.256 0.042 Work intensity 0.008 0.001 Child in a family -0.317 0.080 Other household type -0.089 0.068 Lone parent 0.191 0.069 Couple without children -0.013 0.061 Single person 0.149 0.057 Not married 0.177 0.051 Widower 0.315 0.134 Divorced 0.021 0.055 Socio-economic context Unemployment rate 0.006 0.007 Brussels region -0.706 0.125 Walloon region -0.511 0.075 Welfare agency policy Employment programme participation rate 0.029 0.004 Random Part Welfare agency level 0.025 0.010 Individual level 0.429 0.094
Reference categories: Women, Couple with children, Married & Flanders
*=no improvement of goodness of fit of the model (ns)= not significant
Negative duration dependency Yes*
Longer duration for women with children No
Longer duration for low work intensity Yes
Non-linear relationship for age No
Longer spells if higher unemployment rate Yes* (ns)
Welfare agency population composition effect No
Longer spells if higher amount of benefit Yes*
Shorter duration if higher employment participation rate
Yes
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Remarks:• An exit is not necessarily a meaningful
improvement of the living standard (Kazepov,1999; Saraceno, 2002; Hansen, 2008)
• A short time on social assistance is not necessarily an indication of a good welfare policy (Kazepov, 1999; Saraceno, 2002)
Further study of Probability of leaving to multiple exit states Probability of staying in paid labourIncome level
7. Evidence
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8. Conclusion
• Mainly individual characteristics account for variability in probability of leaving(age, sex, work intensity over former 5 years, household type, marital status)
• 5% of variability in duration is situated at municipality level, not so substantial
• At municipality level: evidence for a regional effect and an effect of social employment participation rateNo significant effect of unemployment rate, though substantive reduction of the variance at municipality level Small significant effect of generosity, but no improvement of the goodness of fit of the modelEvidence suggests time dependency
Confirming evidence for both dependency and heterogeneityMixed evidence for rational choice
