Transparency of the Welfare System and Labor Market Outcomes of Unemployed Workers

Sofie Cairo, Robert Mahlstedt*

*Corresponding author for this work

Research output: Working paperResearch


We study how the transparency of welfare systems affects labor market outcomes of unemployed workers in a large-scale field experiment. Our low-cost information intervention uses a personalized online tool that informs benefit recipients about their personal risk of a benefit reduction when not complying with a work requirement. We find disparate effects reflecting individuals' job search status. Providing personalized information improves labor market outcomes by mitigating the pressure to accept unstable part-time jobs among active job seekers with a low sanction risk. Inactive persons with a high sanction risk leave welfare and rely on alternative income support more frequently.
Original languageEnglish
Place of PublicationBonn
Number of pages42
Publication statusPublished - Dec 2021
SeriesIZA Discussion Paper


  • Unemployment
  • Transfer programs
  • Transparency
  • Sanctions
  • Uncertainty
  • Work requirements
  • Field experiments
  • Information treatment

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