TIME LIMITS ON WELFARE RECEIPT

In the United States today, the term generally refers to the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which replaced the federal cash public assistance program Aid to Families with Dependent Children (AFDC) with the Temporary Assistance to Needy Families (TANF) block grant. This legislation changed the structure of income support for poor families in the United States in a number of very significant ways, including the elimination of the individual entitlement to cash public assistance, the institution of a work-based safety-net for poor families with children (with, for example, the imposition of mandatory requirements and time limits on the receipt of cash public assistance), and the inclusion of family formation issues (such as the reduction of non-marital births and the promotion of marriage) among the welfare system's primary goals. The TANF program must receive Congressional reauthorization by September 30, 2002, and welfare researchers and advocates have focused a great deal of attention on identifying key TANF reauthorization issues and policy goals. Much of this discussion has focused on issues closely related to the core elements of the TANF program, such as the primary purpose of TANF, the size of the TANF block grant, the structure and implementation of time limits and sanctions, and the effectiveness of work first welfare-to-work strategies. In the context of the current economic downturn, the impacts of TANF policies in a weak economy and the ability of the TANF program to cope with increased economic need have also become critically important concerns. This paper provides a brief overview of some key TANF reauthorization issues and concerns that Congress is likely to face as it considers the next phase of welfare reform (see table 1).

Welfare reform: Unanticipated but inevitable consequences for health insurance coverage for the poor

Under Temporary Assistance for Needy Families, families are subject to greater work requirements, and the severity of sanction for noncompliance has increased. Using Wisconsin longitudinal administrative data, the authors performed event history analysis to examine the dynamic patterns of sanctioning and the patterns of benefits following a sanction. They found that very high rates of sanctioning (especially partial sanctions) and multiple sanctions were fairly common but sanction spells were quite short. The most common transition from a sanction was back to full benefit receipt. The authors also examined the factors associated with being sanctioned and the severity of sanctions by comparing a traditional model with an event history model. They found that it is important to estimate a model that takes into account the period of risk. Results confirm that those who may be least able to succeed in the labor market are most likely to be sanctioned. KEY WORDS: event history analysis; poverty; TANF; welfare programs; welfare sanctions ********** The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) ended the federal guarantee of cash assistance for single-parent families with children and replaced the entitlement program, Aid to Families with Dependent Children (AFDC), with the Temporary Assistance for Needy Families (TANF) block grant. Work requirements were a key component of the legislation, and sanctions for noncompliance were an important part of the policy design. Under TANF, sanctions have taken on much greater significance, both because fewer families are exempt from work requirements and because the new policy of full family sanctions means that failure to comply with those requirements can result in the loss of the family's entire cash grant (Pavetti & Bloom, 2001; Pavetti, Derr, & Hesketh, 2003), as well as the loss of food stamps and Medicaid (Cherlin et al., 2001; U.S. General Accounting Office [GAO], 2000). The number of people no longer receiving benefits because they have been sanctioned has increased concern about how often sanctions are used, who is at risk of being sanctioned, and the effects of sanctions on welfare recipients. A number of studies have examined the characteristics of sanctioned families, the reasons these families did not meet their participation requirements, and the later consequences to them. Most of these studies did not focus on sanctions but looked more generally at families who had left welfare (leavers; see Colville, Moore, Smith, & Smucker, 1997; Westra & Routley, 2000) or were conducted under the old AFDC system (Colville et al.; Fraker, Nixon, Losby, Prindle, & Else, 1997; Kornfeld et al., 1999; GAO, 1997). There is less known about the use of sanctions under TANF. Most of the early studies of sanctions were exploratory and descriptive, assessing the characteristics and describing the experiences of sanctioned recipients or sanctioned leavers. Furthermore, much sanction research has measured a sanction as a simple dichotomous variable (sanction, nonsanction) at a particular time. Relatively few studies have examined the severity of sanctions or the timing and duration of sanctions. We used Wisconsin longitudinal administrative data in our study. These data include detailed information on the timing and severity of sanctions, enabling us to examine the dynamic patterns of sanctioning, factors associated with being sanctioned, and the relationship between sanctioning and subsequent outcomes. POLICY CONTEXT States have broad authority and flexibility regarding the design and use of sanctions. The triggers for sanctions and amount of reduction in the grant vary from state to state. There are various types of sanctions tied to work requirements, child support enforcement, and, for teenagers receiving welfare, the requirements to attend school and live with parents. …

Examining strategies used by policy entrepreneurs can enhance our understanding of how policy changes occur in the policy making process. This study builds on the works of Kingdon (1984), Schiller (1995), Worsham (1997) and Mintrom (1997, 2000). Specifically, this study focuses on policy changes pursued by policy entrepreneurs both directly and indirectly related to the Temporary Assistance for Needy Families (TANF) program. The first two chapters of this dissertation introduce the policy changes incorporated in TANF and contrast them to those which made up its predecessor, Aid to Families with Dependent Children (AFDC). How the discussion of domestic violence came about with respect to TANF's policy changes is explicated. Chapter Three offers a theory for how policy entrepreneurs select their strategies when pursuing policy change. Three factors are hypothesized to affect their strategies: the stage in which the policy currently resides, salience of the policy and the other interesteds who oppose the policy change desired by the policy entrepreneur. How each of these influences the policy entrepreneurs selection of strategy is considered. Chapter Four presents two case studies which test this theory. The first focuses on actions taken by Senator Joseph Biden in pursuing a policy change that resulted in the passage of the Violence Against Women Act of 1994. The second examines the strategies adopted by Jody Raphael, J.D., in seeking a policy change, the Family Violence Option (FVO), which was added as an amendment to the Personal Responsibility and Work Reconciliation Act (PRWORA). This Act replaced AFDC with TANF. In Chapter Five, both individual level data and aggregate level data are examined in order to answer the question of whether women on TANF being trapped in abusive relationships, by virtue of the policy changes contained within this legislation. The findings reported herein suggest that correlates of domestic violence cited in other studies hold for the sample utilized in this research. Additionally, the results suggest that the ‘trapping’ effect of the policy changes incorporated in TANF are not reflected by the data examined in this analysis.

Uncontrolled Experiments from the Laboratories of Democracy: Traditional Cash Welfare, Federalism, and Welfare Reform

1. INTRODUCTION In 1996, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) ended Aid for Families with Dependent Children (AFDC), replacing it with the new Temporary Assistance for Needy Families (TANF) program. TANF differs from AFDC by ending the entitlement period of welfare via introduction of a time limit on welfare benefits and work requirement for participants. In this paper, we .analyze the impact of this welfare reform on the early cognitive development of welfare program participants' children using a multiperiod structural model. We first estimate the effects of mothers' work and welfare use on children's ability formation using a sample of single mothers and their children from the National Longitudinal- Survey of Youth 1979 (NLSY79) Cohort. We then simulate different policy initiatives of the welfare reform to evaluate how each particular change impacts work and welfare participation behaviors of the mothers, and as a result, children's cognitive development. Early cognitive development has been found to be a strong predictor of long-term achievement and other outcomes such as educational attainment, crime involvement, salaries, and out-of-wedlock pregnancy (see reviews by Currie and Thomas 1995; Duncan and Brooks-Gunn 1997; Haveman and Wolfe 1995). Thus, it is crucial to understand whether, and by how much welfare program participation affects .children's cognitive outcomes. Moreover, any public policy initiative, such as PRWORA, that affects parents' incentives to work or participate in the welfare program by altering the opportunity .costs of parental time and financial inputs should be carefully evaluated. There is an abundance of studies on the effects of welfare reform on mothers' behaviors. However, implications of welfare reform on children's outcomes have not been studied by many. To our knowledge, other than this paper, there is only one other study. Miller and Zhang. (2009), that .analyzes the indirect effects of welfare reform on children's cognitive outcomes. Earlier studies generally find significantly negative relationships between welfare receipt and various types of child attainment measures. However, these negative relationships may not be causal due to improper comparison groups or the unobserved heterogeneity issue that is not addressed (Cunie 1998; Dahl .and Lochner 2012; Duncan, Magnuson, and Ludwig 2004). Chyi and Ozturk (2013) show that welfare program participation is not detrimental to early development of the children when the analysis is constrained to families who are most disadvantaged (and thus likely to be eligible for welfare benefits) and when unobserved heterogeneity is properly controlled for. We follow their lead and focus only on the attainment of children born to single mothers with 12 or fewer years of schooling. We model unobserved heterogeneity and use exogenous variations in welfare benefits across states and local labor market conditions to alleviate concerns of endogeneity. Moreover, we incorporate the dynamic nature of welfare program participation and employment decisions into our econometric setup. We estimate structural parameters of our model which enable us to run policy simulations with counterfactuals that imitate the changes brought upon by PRWORA. Thus, we not only provide insight on how welfare and employment affect the children's cognitive development, but .also document behavioral responses to the welfare reform and resulting impact on children's outcomes. Our estimates show that on average mother's work and welfare use both are beneficial for children's cognitive development. In our model, their effects are allowed to vary by children's ability endowment and they do; we find that benefits are highest for children with low endowment. Moreover, we allow the effects to vary by mother's attitudes toward welfare receipt and work and by her ability to utilize resources in child-rearing. We model unobserved heterogeneity in these dimensions and identify two types of mothers: mothers who are not likely to use welfare but are very efficient at using welfare resources if they do (Type I) and mothers who are very likely to use welfare but are not efficient at utilizing welfare resources (Type II). …

This chapter examines the development and implementation of the Temporary Assistance for Needy Families (TANF) block-grant program, and its predecessor, Aid to Families with Dependent Children (AFDC). Federal cash assistance to low-income, primarily single-parent families has been politically controversial since the creation of AFDC in 1935. The creation of TANF in 1996 imposed time limits on receipt of cash assistance and strengthened work requirements, while shifting the focus of expenditures away from cash benefits toward services intended to move adult recipients into work. TANF caseloads have fallen dramatically since 1996, and the employment rate of low-income single mothers has increased, but the social impacts of the TANF program have been mixed.

In 1996 the United States revamped its welfare system by eliminating the entitlement to cash benefits under Aid to Families with Dependent Children (AFDC), and replacing it by Temporary Assistance to Needy Families (TANF). Federal financing was converted from open-ended matching grants to fixed block grants. This paper reviews the evidence on the likely impact of block grants for the needy on average benefit levels, total redistributional outlays, and on differentials across states. The econometric evidence on state responses to federal incentives for spending on the needy varies enormously. An evaluation of this evidence, together with an examination of state responses to the federalization of aid to the elderly, blind, and disabled through the Supplementary Security Income program, suggests that in the long run the federal changes will substantially decrease the amount of direct cash redistribution in the United States. A reasonable guess is that average benefits to the needy will be 15 to 30 percent smaller than under current law, while total spending on cash grants could decline by as much as 35 percent. While interstate competition will act to reduce benefit differentials across states, this tendency will be offset by differential matching rate effects. An extreme ‘race to the bottom,’ with a total withering of the transfer state, is unlikely to occur.

The Temporary Assistance for Needy Families (TANF) program is a federal block grant to the states, with a required state contribution. Although often viewed as a cash assistance program with work requirements and services targeted at extremely low-income families with children, only about one-quarter of all state and federal TANF funds are now used for traditional cash aid. Uses of funds vary widely by state, and alternatives range from refundable tax credits to support of state child welfare systems. In this article, the author examines the relationship between state categorical TANF spending and key social, political, and economic characteristics using data from 2015 to 2017 and multilevel linear models. Racial and ethnic demographics of the cash assistance caseload are associated with differences in spending, with states with larger proportions of the caseload composed of people of color devoting a lower percentage of effort to traditional benefits and more to alternative cash transfers. Changes in unemployment rate within states are associated with greater spending on basic assistance and reduced spending on alternative transfers. These findings indicate that, although TANF cash benefits spending may be economically responsive within the program's overall flexible structure, spending patterns raise issues of equity for disadvantaged families.

In this report we use results from evaluations of welfare-to-work programs and findings of basic research on children and families to anticipate the implications for children of the 1996 federal welfare legislation, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA; P.L. 104-193). The new law replaces the Aid to Families with Dependent Children (AFDC) entitlement program with the Temporary Assistance to Needy Families (TANF) block grant to states. Much of the concern about the possible implications of the legislation has focused on adult recipients, especially whether adults will be able to make a transition to stable employment (McMurrer, Sawhill, & Lerman, 1997; Nightingale, 1997). Yet children comprise the majority of those receiving public assistance. In 1995, approximately two-thirds (9.3 of 13.6 million) of those receiving Aid to Families with Dependent Children each month were children (U.S. House of Representatives Committee on Ways and Means, 1996). Further, provisions of the new legislation, particularly the work requirements, have clear implications for children’s child care situations and experiences within the family. Thus, there is also growing concern about how children may be affected by the new policy (see Blank & Blum, 1997; Collins, 1997; Collins & Aber, 1997; Kisker & Ross, 1997; Knitzer & Bernard, 1997; Larner, Terman, & Behrman, 1997; Moffitt & Slade, 1997; Parcel & Menaghan, 1997). The policy change is too recent for us to have a body of research results focusing specifically on PRWORA and children. Yet research findings from two other sources can aid us in anticipating the implications of the new legislation for children. First, some research in the past decade has extended the use of random assignment evaluation studies of welfare-to-work programs to consider effects on both adults and

The moral construction of poverty: Welfare reform in America: Joel F. Handler and Yeheskel Hasenfeld, 269 pp., 1991, Sage Publications, Newbury Park, California, £15.95

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) has targeted lawful immigrants by imposing a broad range of restrictions on access to federally funded benefit programs. Within the federal restrictions, however, states have been granted considerable latitude concerning immigrants. In Temporary Assistance for Needy Families (TANF) and Medicaid, the major benefit programs for low-income children, states are authorized to determine whether these programs are to be provided to immigrant families. First, this study examines variations in immigrant provisions across states in Medicaid, TANF, and state health care programs. Second, the study estimates the impact of state immigrant provisions in those programs on the uninsured among children of immigrants. Using the 1999 Current Population Survey (CPS), the study finds that state-funded Medicaid and state health care programs made available to ineligible immigrants (under PRWORA) significantly decrease the risk of being uninsured for children of immigrants, while controlling all other socio-economic-geographical variables. A child's citizenship is also found to be a significant and strong predictor for being uninsured among children of immigrants.

Reform has transformed traditional entitlement to cash welfare under Aid to Families with Dependent Children (AFDC) into a transitional program known as Temporary Assistance to Needy Families (TANF). Because of the new work requirements and the time-limited nature of assistance, policy makers are increasingly confronted with what to do when welfare recipients do not effectively make the transition from welfare to work. Increasingly, the language of public health is being used to determine who is "employable" and who is not. Thus renewed attention is being focused on the individual characteristics of participants themselves, particularly specific diagnoses that might reduce employability. This article focuses on substance abuse and mental health problems among single mothers and examines their relationship to welfare receipt. We analyze data from the 1994 and 1995 National Household Survey of Drug Abuse (NHSDA) and find that 19 percent of welfare recipients meet the criteria for a DSM-III-R (Diagnostic and Statistical Manual of Mental Disorders, third edition revised) psychiatric diagnosis. About the same percentage have used illicit drugs during the previous year. Logistic regression results indicate that mental and behavioral health problems that are significant barriers to self-sufficiency are increasingly important in this era of time-limited benefits.

Time limits are among the most fundamental of recent welfare reforms. Whereas welfare benefits were an entitlement under the old Aid to Families with Dependent Children (AFDC) program, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which replaced AFDC with the Temporary Aid to Needy Families (TANF) program, restricts most families to 60 months of federally funded benefits. Although the states are free to extend benefits further using their own funds, almost all have incorporated some sort of time limit into their TANF programs. Time limits may affect welfare receipt in two distinct ways. The most obvious effect is mechanical, reducing welfare use once recipients exhaust their benefits. However, time limits may also reduce welfare receipt before recipients reach the limit. If families are forwardlooking, they may reduce their current welfare use in order to preserve their benefits for the future. The purpose of this paper is to provide evidence on such anticipatory, or behavioral, effects of time limits. I use data from the Survey of Income and Program Participation (SIPP) to replicate my earlier estimates based on the Current Population Survey (CPS). I also exploit the SIPP to relax some of the restrictive assumptions that were implicit in my previous work.

Benefit programmes protect individuals against loss of income and provide unemployed individuals the possibility of finding a better match between their qualifications and job vacancies. This positive aspect of inducing workers to achieve better job matches has been shown to increase economic efficiency (Acemoglu & Shimer, 1999; Marimon & Zilibotti, 1999). However, unemployment benefits may also distort incentives by subsidizing long and unproductive job searches. In fact, the generosity of unemployment benefits is generally considered the main factor by which benefit systems affect unemployment. From a societal point of view, therefore, the optimal unemployment benefit system will balance considerations for protection with those for distortion (Feldstein, 2005; Mortensen, 1987). Theory suggests that putting a limit on benefit duration will tend to accelerate job search from the beginning of the unemployment spell and thereby shorten unemployment duration (Pissarides, 2000). Thus, generosity of benefits is determined not only by the amount paid but also by the duration of benefit entitlement. In the US, replacement rates1 are low and duration is short compared to benefit systems in most European countries. In 2005 the maximum duration of unemployment insurance entitlement among OECD countries 2 was shortest in the US at 6 months 3 and longest in Denmark, Norway, Portugal, the Netherlands, France, Finland and Spain, varying between 23 and 48 months (OECD, 2007). At the same time, the gross initial replacement rate was around 50% in the US, while varying between 62% and 90% in the aforementioned European countries. The lower level of generosity of benefits in the US compared to Europe is consistent with the observation of higher levels of active searches and a greater willingness to accept inferior jobs by unemployed workers in the US compared to Europe (Layard, Nickell & Jackman, 2005). As a consequence European policy-makers may be tempted to reduce the generosity of unemployment systems in order to reduce high unemployment levels4. While lowering the replacement rate may be politically intractable (indeed, examples of reductions of benefit rates and amounts are rare), the length of the unemployment benefit entitlement period is often used as a political instrument to improve work incentives for the unemployed. In Spain, for example, the benefit period was altered in 1992, in Slovenia in 1998, in Norway in 1997, in the UK in 1996, in Denmark in 1996, 1998 and 1999, and, more recently, in the Czech Republic in 2004, in Hungary and Portugal in 2006, and in Denmark again in 2010. The important public policy question is whether a more generous unemployment benefit system is causally related to higher unemployment rates. As pointed out in Card and Riddell (1993), there can be several complementary explanations for high unemployment rates, including differences in the fraction of nonworking time that is reported as unemployment (particularly among individuals with very low levels of labour supply), and differences in the overall distributions of working and nonworking time. Recent research on the effect of extended duration of unemployment insurance benefits in the US shows that benefit extensions raised the unemployment rate, but at least half of the effect is attributable to reduced labour force exit among the unemployed rather than to the changes in reemployment rates that are of greater policy concern (Rothstein, 2011). This review will focus on the effect on job finding rates of reducing the maximum duration of entitlement of unemployment benefits, and secondarily on the effects on the quality of these jobs. The intervention of interest is reduction in the maximum duration of entitlement of any kind of unemployment benefit with a known expiration date. The benefits may be unemployment insurance (UI) benefits, or they may be unemployment assistance (UA)/social assistance (SA) benefits as long as they have a known expiration date. In the majority of OECD countries, the UI benefit has a time-limit. In fact, only Belgium has an unlimited UI period. In other countries, the maximum duration varies between 6 months (as for example in the UK and the US) and 36 months (in Iceland). In most OECD countries, a secondary benefit is available for those who have exhausted regular UI benefits. This is known as SA benefits. Unlike UI benefits, SA benefits are generally means-tested without any necessary connection to past employment; they pay a lower level of benefit and are indefinite. We know of only one example of a SA benefit with a time limit: the Temporary Assistance to Needy Families (TANF) which is available in the US. The federal government requires states to impose between 2- or 5-year limits on TANF (Gustafson & Levine, 1997). In a minority of OECD countries, UA benefits are paid after exhaustion of UI benefits. Like SA benefits, they are generally means-tested, pay a lower level of benefits and, excepting Hungary, Portugal and Sweden, are indefinite. Unemployment benefits with an indefinite time limit or non-financial benefits will be excluded from this review. Search theory offers an explanation for how this intervention might work. According to search theory, one can derive a relationship between the job-finding rate and the parameters of the benefit system, in particular the maximum benefit duration and the replacement rate (Mortensen, 1977). This relationship is driven by adjustments in search effort and reservation wages. The reservation wage is the minimum wage at which the unemployed are willing to accept a job. Forward-looking unemployed workers chose their current search effort and reservation wage in order to maximize the sum of the utility flow realized during the current period, plus the expected discounted future utility flow given that an optimal strategy will be pursued in every future period. The current search effort and reservation wage are thus affected by the future level of benefits. When the benefit period expires, the unemployed person experiences a potentially large drop in income. As the time of benefit exhaustion approaches, the value to that person of remaining unemployed falls, implying a higher search effort and/or a fall in the reservation wage, leading to a higher exit rate out of unemployment (Mortensen, 1977). This non-stationarity implies that unemployed individuals with different lengths of benefit entitlement have different optimal paths of reservation wage and search effort over time (van den Berg 1990). A shorter entitlement period gives the unemployed individual a stronger incentive to quickly gain employment in order to avoid the drop in income after the exhaustion date. How strong the incentive is depends on the magnitude of the income drop. If no secondary benefit is available for those who have exhausted their current benefit, the incentive to gain employment will be stronger. If an increased job finding rate is mainly driven by lowering the reservation wage, a lower job match quality is to be expected, for example, in the form of lower wages and/or lower re-employment duration. A number of factors may have an impact on the magnitude of the expected increase in the job finding rate. In general, the overall labour market conditions (i.e. the vacancy rate5 and, in particular, the unemployment rate) have an impact on the availability of and competition for jobs. If the vacancy rate is high (i.e. the number of vacancies is high in relation to job seekers) we would expect a bigger effect on job finding rates than if the vacancy rate is low. We would further expect a lower effect if the unemployment rate is high, regardless of the vacancy rate. If the vacancy rate is low coincident with a high unemployment rate, competition for available jobs is likely to be high. If the vacancy rate is high coincident with a high unemployment rate, it suggests mismatch in the labour market (i.e., the process by which vacant jobs and job seekers meet is not efficient) (Filges & Larsen, 2000; Pissarides, 2000). Whether compulsory participation in active labour market programmes is part of the unemployment system may also have an impact on the effect of maximum duration of entitlement. The compulsory aspect of activation may provide an incentive for unemployed individuals to look for and return to work prior to programme participation; the so called threat effect. Filges and Hansen (2015) summarize the available evidence on the threat effect of active labour market programmes and report a significant threat effect of compulsory participation in active labour market programmes. Further, actual participation in active labour market programmes may improve some of the participants' qualifications, thus helping them to find a job. Alternatively, active labour market programmes may have negative stigmatization and signalling effects to employers. Programmes associated with participants having poor employment prospect may carry a stigma. Because of asymmetric information, employers do not know the productivity of new workers, some of whom they might hire from the pool of the unemployed. Prospective employers might then perceive participants in such programmes as low productivity workers or workers with tenuous labour market attachment (Kluve et al. 1999; Kluve et al., 2007). A recent systematic review by Filges et al. (2015) investigated the effect of participating in active labour market programmes and found that there is a significant positive effect, although small, of participating in active labour market programmes. The effect reported in Filges et al. (2015) is however a pure post-programme effect of active labour market programmes; it refers to the period after participation in a programme. The net effect of active labour market programme participation on job-finding rates is, however, composed of two separate effects: a lock-in effect and a post-programme effect. The lock-in effect refers to the period of participation in a programme. During this period, job-search intensity may be lowered because there is less time to search for a job, and participants may want to complete an on-going skill-enhancing activity; hence the lock-in effect. The combination of the two effects, lock-in and post-programme, consequently determines the net effects of active labour market programme participation on unemployment duration. These additional effects on the search behaviour and employment prospects when compulsory participation in active labour market programmes is part of the unemployment system may dampen the observed effects of maximum duration of entitlement on job finding rates. Finally, the type of unemployment benefit may have an impact on the effect on the job finding rate. As mentioned above, some countries employ two systems to provide benefits to unemployed individuals: an unemployment insurance system for individuals who typically have a strong labour market attachment (UI benefits) and a social welfare system for individuals who often have other problems in addition to unemployment (SA or UA benefits). The effect size in social welfare systems offering unemployment benefits with a known expiration date is, due to the participants' lower labour market attachment, expected to be less than the effect size in unemployment insurance systems with a known expiration date. In order to reduce high unemployment levels, policy-makers may wish to reduce the generosity of the unemployment system either in amount (the replacement rate) or in maximum potential duration. The positive correlation between unemployment benefit generosity in terms of the replacement rate and unemployment duration is well established at the empirical level (Layard et al., 2005). However, it may be politically intractable to lower the replacement rate, and there are indeed strong efficiency and equity arguments for having a reasonable value of unemployment benefits (Acemoglu & Shimer, 1999; Marimon & Zilibotti, 1999). Search theory suggests that an increase in unemployment benefit generosity, in terms of maximum duration of benefit entitlement, has a negative impact on the job search activities of the unemployed increasing their unemployment duration. There is clear evidence that the prospect of exhaustion of benefits results in a significantly increased incentive for finding work, although the effect is small (Filges et al., 2013). Hence, shortening the benefit eligibility period may reduce the share of long and unproductive job searches somewhat. The conclusion in Filges et al. (2013) however leaves unanswered the question of by how much reducing the maximum unemployment benefit entitlement will decrease unemployment duration. There are many empirical papers on the effect of maximum benefit entitlement on unemployed individuals (Caliendo, Tatsiramos and Uhlendoff 2009; Bennmarker, Carling & Holmlund, 2007; Ham & Rea, 1987; Hunt, 1995; Katz & Meyer, 1990 and Lalive & Zweimüller, 2004), but the empirical research has not been summarized in a systematic review to obtain a clearer picture of the available evidence on the employment effect of reducing maximum duration of benefit entitlement. One paper provides a review of the literature on how incentives in unemployment insurance can be improved (Fredriksson and Holmlund 2006). However, it is not a systematic review and, furthermore, the authors do not make the important distinction between exits to employment and exits to other destinations such as such as other kinds of benefits or out of the labour force. Distinguishing between destinations is vital. As shown in Card, Chetty and Weber (2007), the exit rate from registered unemployment increases over 10 times more than the rate of re-employment at the expiration of benefits. The difference between the two measures arises because many individuals leave the unemployment register immediately after their benefits expire without returning to work. There is a great deal of political interest in optimizing the unemployment benefit system so it balances the protection and distortion dimensions. The political interest is to reduce the unemployment level, to prevent exploitation of the unemployment benefit system and at the same time protect the unemployed individuals from the consequences of involuntary unemployment. It is therefore of great importance to establish the effect of reducing maximum duration of unemployment benefit entitlement on employment probabilities. The purpose of this review is to systematically uncover relevant studies in the literature that measure the effects of shortening the maximum duration of unemployment benefit entitlement on job finding rates, and to synthesize the effects in a transparent manner. As a secondary objective we will, where possible, investigate the extent to which the effects differ among different groups of unemployed such as high/low educated or men/women, and further explore from which point in the unemployment spell do unemployed individuals react to the length of benefit entitlement. The title for this systematic review was approved in The Campbell Collaboration on 9. October 2012. Study designs that use a well-defined control group are eligible. The main control or comparison condition is no change in maximum duration of benefit entitlement. Non-randomized studies, where the reduction in maximum duration of benefit entitlement has occurred in the course of usual decisions outside the researcher's control must demonstrate pre-treatment group equivalence via matching, statistical controls, or evidence of equivalence on key risk variables (e.g., labour market conditions) and participant characteristics. These factors are outlined in section ‘Assessment of risk of bias in included studies’ under the subheading of Confounding, and the methodological appropriateness of the included studies will be assessed according to the risk of bias model outlined in section ‘Assessment of risk of bias in included studies’. Studies of the effect of reducing unemployment benefit entitlement typically are estimated on data collected from administrative registers or by questionnaires. Studies that use different data sources for treatment and control groups will not be eligible. Only studies that use individual micro-data are eligible. Studies that rely on regional or national time series data are not eligible, even though micro-econometric estimates of individual effects merely provide partial information about the full impact of shortening the maximum duration of benefit entitlement (Calmfors, 1994; Calmfors, 1995). We will include studies irrespective of their publication status, and their electronic availability. We will include unemployed individuals who receive some sort of time limited benefit during their unemployment spell. The International Labour Office (ILO) definition of an unemployed individual is a person, male or female, aged 15-74, without a job who is available for work and either has searched for work in the past four weeks or is available to start work within two weeks and/or is waiting to start a job already obtained (ILO, 1990); however, different countries may apply different definitions of an unemployed individual, see for example Statistics Denmark (2009). We will include participants receiving all types of unemployment benefits with a known exhaustion date. The only restriction is that the benefits must be related to being unemployed. We will therefore exclude individuals who only receive other types of benefits not related to being unemployed. We will include all unemployed participants regardless of age, gender, etc. who receive some sort of time limited benefit during their unemployment spell. The intervention is reduction in the maximum duration of entitlement of any kind of unemployment benefits. The benefits may be unemployment insurance (UI) benefits or they may be unemployment assistance (UA)/social assistance (SA). The only requirement is that the benefit must have a known expiration date. The UI benefit usually has a known time-limit whereas UA and SA usually are indefinite. Unemployment benefits with an indefinite time limit or non-financial benefits will be excluded from this review. The objective is to determine whether reducing the maximum entitlement to unemployment benefits motivates unemployed individuals to find a job more quickly. Distinguishing between destinations is therefore vital. The primary outcome is exits to employment. Studies only looking at exits to other destinations such as other types of social benefits or non-employment and studies who do not distinguish between destinations are not eligible. We will consider secondary outcomes in terms of the impact that reducing the maximum duration of entitlement of benefit has on the duration of re-employment and on income. This will the done in order to obtain a clearer picture of the effect that reducing the maximum entitlement of unemployment benefit has on the quality of the job. If the duration of re-employment or the wage is low, this could indicate that reducing entitlement forces unemployed individuals to find jobs that do not match their qualifications and therefore they may return to unemployment quickly. Outcomes measured as hazard ratios may be reported as an overall effect on the hazard ratio, or may be reported separate for various unemployment duration intervals. All time points reported will be considered. All types of settings are eligible. Relevant studies will be identified through electronic searches of bibliographic databases, research networks, government policy databanks and internet search engines. No language or date restrictions are applied in the searches6. An example of the search strategy for Business Source Elite is listed in Appendix 1.4. The strategy will be modified for the different databases. We will report full details of the modifications in the completed review. Additional searches will be made by means of Google (including Google Scholar) and we will check the first 150 hits. OpenSIGLE will be used to search for European grey literature (http://opensigle.inist.fr/). Copies of relevant documents will be made and we will record the exact URL and date of access for each relevant document. Websites of the following private independent research institutes and economic networks will be searched: IZA -- Institute of the Study of Labor (www.iza.org) CEPR -- Centre for Economic Policy Research (www.cepr.org) NBER -- National Bureau of Economic Research (www.nber.org) MDRC -- the Manpower Demonstration Research Corporation -- (www.mdrc.org) CESifo -- the cooperation between CES (Center for Economic Studies) and IFO (Institute for Economic Research) -- (www.cesifo-group.de/portal/page/portal/ifoHome) are all covered via IDEAS. In addition we will look into the following sites: Danish Economic Councils (www.dors.dk) OECD - the Organisation for Economic Co-operation and Development (www.oecd.org) IMF - The International Monetary Fund (www.imf.org) AIECE - Association of European Conjuncture Institutes (www.aiece.org) ESRC - Economic Social Research Council (www.esrc.ac.uk) Copenhagen Economics (www.copenhageneconomics.com) SSRN -- Social Science Research Network (www.ssrn.com) will also be searched to uncover potential preprint discussion papers. Unpublished theses and dissertations will be searched through the databases: Theses and dissertations and Theses Canada. Copies of relevant documents from Internet-based sources will be made. We will record the exact URL and date of of included studies and of relevant will be of Labor and will be searched for the and the available of of included studies and relevant will be searched for potential new with national and will be considered to and on-going We expect that a of the studies we will have been without of there is no for in labour market This among other from some of of participants due to about of The in these studies without of participants is the of the effect. studies use in benefit or changes of the maximum entitlement period. A policy is to the maximum benefit period when labour market conditions are expected to studies use this policy to the effect on unemployment duration & Rea, 1987; Hunt, and Katz & Meyer, 1990). It is however to rely on such a as these changes any other policy If the of the change are not for it will of the effect will be due to the labour market conditions that to the change in entitlement in the first A more recent & Zweimüller, extended benefit entitlement in and four different in order to the effect of extended benefit entitlement from the impact of labour The extended benefit entitlement was to the labour market problems in and for of The was therefore limited to job seekers aged or in for a limited time period (the after implying that there may be many workers who are to different for time and they different of where no are consider the policy of extended benefit entitlement as thereby to the when it can be that the individuals are not to during the observation period Lalive & Zweimüller, for further The same of apply to all changes to the maximum entitlement period. example the by and of the unemployment insurance system in The reduced the maximum duration of benefits, by half for most groups of the effect, they a strategy and the of employment and after the for those affected with the job finding for those who not avoid bias due to of the from employment to they only consider data for the period of 2 months and 2 months after the The authors further that it is a as the in potential benefit duration to the of the labour market and furthermore, potential benefit duration for different groups of unemployed. In Tatsiramos & the is on a The strategy on a in the maximum duration of unemployment benefits at the of in unemployed who are the with unemployed the gives a measure of the effect of maximum duration of benefits. is the in Lalive on a in the potential benefit duration at and in We will into the of of the studies to determine to whether individuals in groups (i.e. whether individuals may have whether there treatment groups and whether several studies are on the same data included in this review will be for in the of and the of as statistical can when they are When have been we will effect estimates and their & 2011). In where have not applied that control for effects, we will the correlation & and Studies with intervention groups with different individuals will be included in this review. avoid problems with between effect we will apply & However, studies that this around studies included in the data et al., If this number be we will use a effect size (the in order to avoid between effect This provides an of the effect size but the effects applied when effect are better in terms of than do effects 2007). However, of when effect are included are less often than If is not (e.g., the and/or control groups include the same only one intervention group will be and compared to the control group to avoid The of which to include will be on risk of bias We will the that we to have the least risk of bias bias and in of the data will be In some several studies may have used the same of data or some studies may have used only a of a used in We will review all such studies, but in the we will only include one of the effect from each of This will be done to avoid between the (i.e. the estimates of the in the The of which to include will be on risk of bias of the We will the from the that we to have the least risk of bias If two studies are to have the same risk of bias and one of the studies a of a used in or studies, we will include the the full of When the results are measured at time each outcome at each time point will be in a separate with other studies at a time As a these will be according to length of unemployment duration as to less than 6 6 months to more than However, the studies provide for an of relevant and duration for the of we will the the of review two review will first and to exclude studies that are Studies considered by at least one or studies there is in