The Labour Supply, Unemployment and Participation of Lone Mothers in In‐Work Transfer Programmes

In-work transfer schemes have recently been suggested as a device for encouraging labor force participation and reducing the severity of the disincentives associated with out-of-work income support schemes. Here the authors estimate a discrete choice labor supply model which allows for endogenous in-work welfare program participation. They also allow for involuntary unemployment so as to distinguish between program nonparticipation and an inability to obtain work and thereby generate an eligibility to the program. Copyright 1997 by Royal Economic Society.