Single Mothers, Welfare, and Incentives to Work

Abstract. This paper analyses the effect of a reform in the French single parents allowance on the labor supply of single mothers with very young children. The reform aimed at encouraging participation by allowing eligible single parents to accumulate welfare benefits and labor earnings for a limited period of time. The analysis shows that eligible single mothers were significantly more likely to work after the reform. During the same period, the employment rate of married mothers with young children did not experience a significant change, suggesting that at least part of the increase among single mothers was a consequence of the reform.