The Impact of Workfare Income Supplement on Spousal Labour Market Outcomes

Building on an earlier study which found that the Workfare Income Supplement (WIS) scheme had a positive impact on the employment rates of WIS-eligible individuals, this study examines how individuals responded to their spouses’ eligibility for WIS. Our findings indicate that the labour market outcomes of less-educated Singaporeans were not adversely affected by their spouses’ eligibility for WIS. In particular, there is no evidence to suggest that spousal eligibility for WIS reduced individuals’ employment rates across all age groups. On the contrary, we find that less-educated Singaporeans who were already in employment tended to increase their work effort when their spouses became eligible for WIS.

The results of this study differed from findings on workfare schemes in countries like the US and UK. As the eligibility criteria for the workfare schemes in the US and UK are based on household income, they tend to have the unintended effect of encouraging an individual to leave the workforce when his/her spouse works so that the household income can remain within the scheme’s eligibility threshold. By contrast, our results suggest that WIS – which uses individual income rather than household income as part of its eligibility criteria – has not resulted in any adverse labour market responses at the spousal level.

The views expressed in this paper are solely those of the authors and do not necessarily reflect those of the Ministry of Trade and Industry or the Government of Singapore.

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