Many countries provide extensive in-kind public transfers for specific needs of particular client groups such as the elderly, the disabled, and children. However, this may crowd out private expenditures on the goods in question and, to some extent, undermine the case for not simply giving cash....

Some existing welfare programs ("work-first") require participants to work in exchange for benefits. Others ("job search-first") emphasize private job-search and provide assistance in finding and retaining a durable employment. This paper studies the optimal design of welfare programs when (i)...