Abstract

If people living in a couple household are subject to an adverse individual income shock, other household members might react by increasing their labour supply. This could at least partly compensate for a temporary income reduction by a benefit sanction. We analyse, in how far a partner of a sanctioned person reacts to the person’s benefit sanction by taking up work to increase the household’s earnings using administrative data of non-employed welfare benefit recipients in Germany. We study couple households and plan to simultaneously model the time until each partner receives a benefit sanction after their entry into welfare receipt. We also estimate for each individual the effects of an own benefit sanction and of a partner’s benefit sanction on the exit rates from non-employment into employment. The causal effects will be estimated by timing-of-events duration models. Moreover, we conduct a qualitative survey withjob centre personnel, to shed some light on how they implement the sanction process and how they assess the effects of a sanction or a sanction announcement.