THE LABOR SUPPLY, UNEMPLOYMENT AND PARTICIPATION OF LONE MOTHERS IN IN-WORK TRANSFER PROGRAMS

In-work transfer schemes have recently been suggested as a device for encouraging labour force participation and reducing the severity of th e disincentives associated with out-of-work income support schemes. He re we estimate a discrete choice labour supply model which allows for endogenous in-work welfare programme participation. We also allow for involuntary unemployment so as to distinguish between programme non-pa rticipation and an inability to obtain work and thereby generate an el igibility to the programme.