The latin model of welfaredo "insertion contracts" reduce long-term dependence?

Resumen

This paper aims to present an assessment of the welfare policies implemented in most South European countries. Welfare programs in these countries try to combine a basic level of economic protection and measures favoring life and labor skills of low-income households. We focus on a specific program set up with the twofold strategy of cash and insertion benefits (Madrid’s IMI) and, more precisely, on the so-called ‘insertion projects’, consisting in a gradual mix of job search assistance, training and subsidized jobs. We evaluate the effects of these ‘insertion projects’ on welfare recidivism and the duration of off-welfare spells using propensity score-matching methods. Our results suggest that a variety of estimators produce estimates of ‘insertion project’ effects that are quite similar. Both recidivism rates as well as the duration of off-welfare spells suggest potentially successful interventions.