The Important Role of Time Limits When Consumers Choose Their Time in Service

A main challenge that service providers face when managing service systems is how to generate value and regulate congestion at the same time. To this end, classical queueing models suggest managers charge per-use fees and invest in capacity to speed up the service. However, in discretionary services, in which consumers value time in service and choose how long to stay, per-use fees result in suboptimal performance and speeding up does not apply. We study a queueing model of a service provider and rational consumers who are heterogenous in their requirements for service duration. Consumers incur disutility from waiting and choose whether to join and how long to spend in service. We consider time limits as a novel mechanism that may help in controlling congestion. Time limits put a cap on the maximum time that customers can spend in service. We analyze their effectiveness when combined with two price schemes: per-use fees and price rates. Time limits are effective because they reduce time in service and impact waiting times and joining behavior. Revenue maximizing firms and social planners who maximize social welfare benefit from implementing time limits in addition to price rates. Social planners who seek to maximize consumer welfare, however, focus on regulating congestion and should, therefore, offer the service for free but implement time limits if congestion levels are high. The attractiveness of time limits goes further. We show that time limits are not only a useful lever that works well when combined with simple price mechanisms, but they are in fact optimal when congestion is high. Service providers can achieve the first-best outcome and extract all customer surplus by coupling a time limit with an optimal price mechanism. The attractiveness of time limits stems from their ability to reduce not only the average time spent in service, but also its variance. This is highly effective in settings in which customers’ service times impose externalities on others’ waiting times. Thus, we conclude that providers of discretionary services should set time limits when congestion is an issue. This paper was accepted by Vishal Gaur, operations management.

First step and last resort: One-Euro-Jobs after the reform

Job creation programmes aim at increasing the employability of hard-to-place unemployed, and eventually integrating them into employment. Yet, previous evaluation studies have been pessimistic about their efficacy. For One-Euro-Jobs, a job creation programme for welfare benefit recipients in Germany, previous evaluations found unfavourable effects particularly for easier-to-place participants. Thus, in 2012 the legislator reformed the programme in order to target the hard-to-place more accurately. This study is the first post-reform evaluation of One-Euro-Jobs. We find that, although the programme is indeed better targeted than before, One-Euro-Jobs decrease participants’ employment chances within three years after programme entry. These outcomes are worse than those found for pre-reform participants. We cannot conclude with certainty whether the reform decreased the programme’s efficacy, but we identify channels through which the reform and other contemporaneous changes may have done so. These channels include changes in programme design features, changes in business-cycle conditions, and prolonged lock-in effects due to “programme careers”. To substantiate the latter explanation, we also provide novel evidence that One-Euro-Jobs seem to initiate programme careers.

State tactics of welfare benefit minimisation: The power of governing documents

This article draws on interviews with 41 Australian separated mothers, and the government forms, information and instructions used to administer their child support and benefit entitlements, to reveal four tactics through which women’s decision-making was coordinated to produce financial benefits to the state. The state pursued its preferred outcome by foregrounding women’s obligation to seek and collect child support, while at the same time, information on alternative choices was made deliberately opaque – making the state’s foregrounded option more likely. If women were entitled to, or sought, options that lay outside the default choice, the onus was on them to investigate, instigate and persevere with what was made to be a deliberately onerous and opaque process. As a result, the administration of Australian child support policy perpetuated low-income women’s experiences of economic and social inequity, entrenching the feminisation of poverty in single parent families.

Disabled but not deserving? The perceived deservingness of disability welfare benefit claimants

While disability benefits make up the largest group of claimants in high-income countries, we know surprisingly little about which disabled people are seen as ‘deserving’ benefits, nor whether different people in different countries judge deservingness-related characteristics similarly. This is surprising given they are increasingly the focus of retrenchment, which often affirms the deservingness of ‘truly deserving’ disabled people while focusing cuts and demands on those ‘less deserving’. This article addresses this gap using two vignette-based factorial survey experiments: (i) the nine-country ‘Stigma in Global Context – Mental Health Study’ (SGC-MHS); (ii) a new YouGov survey in Norway/the UK, together with UK replication. I find a hierarchy of symptoms/impairments, from wheelchair use (perceived as most deserving), to schizophrenia and back pain, fibromyalgia, depression and finally asthma (least deserving). Direct manipulations of deservingness-related characteristics also influence judgements, including membership of ethnic/racial ingroups and particularly blameworthiness and medical legitimation. In contrast, the effects of work ability, age and work history are relatively weak, particularly when compared to the effects on unemployed claimants. Finally, for non-disabled unemployed claimants, I confirm previous findings that right-wingers respond more strongly to deservingness-related characteristics, but Norwegians and Britons respond similarly. For disabled claimants, however, the existing picture is challenged, with, for example, Britons responding more strongly to these characteristics than Norwegians. I conclude by drawing together the implications for policy, particularly the politics of disability benefits, the role of medical legitimation and the legitimacy challenges of the increasing role of mental health in disability benefit recipiency.

New administrative data on welfare dynamics in Germany: the Sample of Integrated Welfare Benefit Biographies (SIG)

The Sample of Integrated Welfare Benefit Biographies (SIG) is a new administrative longitudinal microdata set representative of recipients of Germany’s main welfare programme, the Unemployment Benefit II (UB II, Arbeitslosengeld II). The data set contains detailed longitudinal information on welfare receipt and labour market activities, and hence enables researchers to analyse the dynamics of benefit receipt, income and employment. A distinct feature of the SIG is that it provides information not only for individual benefit recipients but also for family members, including children and partners. This is possible because eligibility for UB II benefits depends on the household structure, and it is means-tested on household income. In addition to socio-demographic and regional information, the SIG contains extensive information on the employment biographies of benefit recipients and their household members from the Integrated Employment Biographies (IEB) of the Institute for Employment Research (IAB). This allows researchers to examine the interaction between labour market participation and benefit receipt. The SIG is available to researchers at the Research Data Centre (FDZ) of the Federal Employment Agency (BA) at the IAB.

Alcohol use in adolescents and adult psychopathology and social outcomes: Findings from a 35-year cohort study

Objective: To examine the consequences of alcohol consumption and symptoms of alcohol use disorder during adolescence and later adulthood psychopathology and social outcomes. Methods: A longitudinal, prospective birth cohort study, the Christchurch Health and Development Study, was examined across a 35-year period. We estimated the associations between two measures of adolescent alcohol use (volume of alcohol consumed and symptoms of alcohol use disorder) and two later internalising disorders, externalising psychopathology measured by substance use disorders and psychosocial outcomes in adulthood, adjusting for individual and family factors from childhood. Results: The pattern of results indicates alcohol symptoms predict internalising disorder in adulthood. Volume of alcohol used in adolescence predicted adult substance use disorders, lower educational attainment and higher risk of welfare benefit receipt in adulthood in fully adjusted models. Conclusion: Early consumption of larger volumes of alcohol led to continuation of this pattern in adult life with resulting poorer educational achievement, increased welfare benefit receipt and substance use disorders. Early symptoms of alcohol use disorder, however, led to increased adult levels of mental health disorders. This relationship persisted within a 20-year study period and after adjustment for statistically significant covariate factors. The study shows that early patterns of alcohol use have a direct and specific impact upon adult outcomes.

Coaching, Counseling, Case-Working: Do They Help the Older Unemployed Out of Benefit Receipt and Back Into the Labor Market?

Intensified counseling, job search assistance and related policies have been found to be effective for labor market integration of the unemployed by a large number of studies, but the evidence for older and hard-to-place unemployed is more mixed. In this paper, we present key results for a large-scale active labor market program directed at the older unemployed in Germany. To identify the treatment effects, we exploit regional variation in program participation. We use a combination of different evaluation estimators to check the sensitivity of the results to selection, substitution and local labor market effects. We find positive effects of the program in the range of 5-10 percentage points on integration into unsubsidized employment. However, there are also substantial lock-in effects, such that program participants have a higher probability of remaining on public welfare benefit receipt for up to 1 year after commencing the program.

Do welfare benefits compensate for globalization among affluent democracies?

This article examines the nexus of globalization, welfare systems and income inequality, in which a key theme is the assessment of how the distributional consequences of globalization are altered by the welfare benefit programmes of advanced welfare states. Existing literature contends that globalization is one of the principle reasons for the current increases in income inequality in developed economies. However, the distributional effects of globalization can vary across disparate national contexts. The study investigates whether welfare systems successfully compensate those who are displaced by external competition while reducing the income inequalities caused by globalization. For the empirical analysis, both random- and fixed-effects models with cluster-robust standard errors are utilized, as are comprehensive measures of globalization, welfare policy and income inequality. The results from 16 affluent democracies between 1980 and 2010 show that some aspects of globalization were significantly related to increased income inequality; however, the relationship was also significantly moderated by generous welfare benefit programmes. These findings support the argument that welfare systems play a critical role in compensating for the rising income inequalities caused by globalization.