Farrell, Lisa and Frijters, P. (2008) Choosing to become a 'lost cause': the perverse effects of benefit preconditions. Oxford Economic Papers, 60 (1). pp. 1-19. ISSN 0030-7653

This paper argues that preconditions for welfare benefit entitlements based on labour market prospects can be counterproductive when they create an incentive for individuals to abstain from any investment earlier in life that could improve future prospects. Benefit entitlements based partly on investments made prior to labour market entry are then Pareto-improving.