Estimating The Forgone Income Of A Workfare Program: Case Colombia.

Abstract: Colombia, as many Latin-American countries have designed a series of welfare programs in order to relief poverty, due to the crisis experimented during the 90s. Hence, the present research estimate the impact on earnings of one of the welfare program implemented in Colombia “Empleo en Acción” and see the possible forgone income from participate in the program. Thereby, based on Diff-Diff method the research obtained as a main results that the program produce an average increment in earnings, where the younger and women participants have greater increment than the other groups of participants. However, forgone income where found for participants, which could represent that the program may displaces work and it confirms the hypothesis that participants who join the program may face a high opportunity cost in the short term.