Resumen de The Latin Model of Welfare: Do "Insertion Contracts" Reduce Long-Term Dependence?

Luis Ayala Cañón, Magdalena Rodríguez

• 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 (�insertion benefits�) 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 propensity score estimators appear to reduce selectivity due to nonrandom participation. Both recidivism rates as well as the duration of off-welfare spells suggest potentially successful interventions.