Do Red-Flagged Clients Exit Social Assistance Earlier than Others? The Case of the Finnish Social Assistance System

Abstract

We examine an early ‘red flag system’ in the Finnish social assistance system and its efficiency in reducing the length of social assistance spells. We utilise the age-threshold in the policy that requires notifying social services on beneficiaries under twenty-five years of age after four months of social assistance receipt. Using monthly administrative data covering all twenty-three to twenty-six-year-old social assistance beneficiaries in Finland in 2018-2019, we compare the social assistance receipt of those below and above the age-threshold. Our findings show that those who are ‘red flagged’ do not exit social assistance earlier than others. On the contrary, four months after the notification is sent to social services, they are more likely to still have social assistance as their primary source of income compared to the twenty-five to twenty-six-year-old individuals. Our results shed light on the little discussed question on how to combine social work with digitalised and automatised welfare.