No full-text available
To read the full-text of this research,
you can request a copy directly from the author.
Evaluating Welfare Reform in the US
... As such, social spending has expansionary effects on GDP [see Furceri & Zdzienicka, 2012, for example]. Thirdly, social spending that promotes labor participation is associated with higher economic growth [see Blank, 2002 andArjona, Ladaique, &Pearson, 2002, for example.] Finally, some studies suggest that the relationship between social spending and GDP is too weak to draw conclusions because they cannot find a general pattern between the two variables across different countries or because the relationship between the two is not statistically significant [see Czech &Tusinska, 2016 andCammeraat, 2020, for example.] ...
In this paper, we study the effects of social spending on long-term economic performance in the USA from 1949 to 2019 using vector auto-regressive models. We break down social spending into six programs to identify the economic effects of different social programs. Overall, social spending has a positive impact on private saving but an adverse effect on the unemployment rate. Due to its dominant distortionary impact on the labor market, social spending decreases GDP. However, these effects are minimal and are primarily short-term. The economic implications of the different social spending programs on the economy are similar but different in magnitude. The impact of social security and medical care spending on GDP is not significant. In turn, the adverse effects of veteran benefits and unemployment insurance on GDP are dominated by the short-term impact. In contrast, the effects of public assistance are more evenly distributed, and the adverse effects of other social assistance are exclusively long-term. Overall, the message is that although social spending adversely affects economic performance, these effects are small and primarily short-term. As such, the quest for increased social protection and improved social welfare does not seem to come at a significant economic cost. This attests to the sustainability of such policies.
... Numerous studies have examined the impact of government assistance, benefits structures, and taxes on economic outcomes in the United States (Auten & Carroll, 1999;Blank, 2002;Blundell et al., 2016;Eissa, 1995;Ohanian et al., 2008). For example, studies find that high-income earners are especially sensitive to effective tax rates (Gruber & Saez, 2002). ...
This paper highlights a bigger problem than benefits cliffs for people receiving government assistance, which we call “disincentive deserts.” These “deserts” are long ranges of work effort with 90–100% effective marginal tax rates (EMTRs). Using a tax/federal benefits simulator developed for Forsyth County, NC, we show that EMTRs for individuals receiving benefits range between 90% and 100% through a vast range of income. A rational individual would never work more than part-time, according to indifference curve theory. We discuss opportunities for the private sector to reconsider rewards for employees, since wage increases may harm some low-income workers because of cuts in their government benefits.
Since the War on Poverty in the 1960s, the U.S. social safety net has shifted away from direct cash assistance for the lowest-income households and toward tax-based transfers targeted at working families with children. Previous research has assessed this shift by evaluating its effect on the national poverty rate. Doing so, however, overlooks how it may also have led to increased inequality among low-income households. We apply a decomposition framework to measure how changes in taxes/transfers and composition have affected trends in inequality below the poverty line from 1967 to 2019. Income inequality among the poorest households has been volatile since the 1960s, and changes to the American welfare state played a decisive role in expanding or reducing inequality below the poverty line. Unlike in previous decades, after the mid-1990s, the policies that most reduced poverty were also those that most increased inequality among the poor. These findings challenge standard theories regarding the effectiveness of income transfers in reducing poverty by revealing that recent state-led antipoverty efforts have placed the near poor and the deeply poor on divergent paths.
Poverty is a pressing and persistent problem. While its extent varies across countries, its presence always represents the diminution of human capacity. Therefore, it seems natural to want to do something about it. Have countries made progress in mitigating poverty? How do we determine who is poor and who is not poor? What intuitions or theories guide the design of anti-poverty policy? Is overall labor market performance the key to keeping the poverty rate low? Or, does it matter how well-connected an individual is to those who know about the availability of jobs? Does being an immigrant increase the odds of being poor? Are there anti-poverty policies that work? For whom do they work? If I'm poor, will I have access to health care and housing? Am I more likely to be obese, polluted upon, incarcerated, un-banked, and without assets if I'm poor? Is poverty too hard a problem for economic analysis? These are some of the questions that a group of scholars have come together to confront in The Oxford Handbook of the Economics of Poverty. The book is written in a style that encourages the reader to think critically about poverty. Theories are presented in a rigorous but not overly technical way; concise and straightforward empirical analyses enlighten key policy issues. The volume covers topics such as poverty in the twenty-first century; labor market factors; poverty policy; poverty dynamics; the dimensions of poverty; and trends and issues in anti-poverty policy. A goal of the book is to stimulate further research on poverty. To that end, several articles challenge conventional thinking about poverty and in some cases present specific proposals for the reform of economic and social policy.
Poverty is a pressing and persistent problem. While its extent varies across countries, its presence always represents the diminution of human capacity. Therefore, it seems natural to want to do something about it. Have countries made progress in mitigating poverty? How do we determine who is poor and who is not poor? What intuitions or theories guide the design of anti-poverty policy? Is overall labor market performance the key to keeping the poverty rate low? Or, does it matter how well-connected an individual is to those who know about the availability of jobs? Does being an immigrant increase the odds of being poor? Are there anti-poverty policies that work? For whom do they work? If I'm poor, will I have access to health care and housing? Am I more likely to be obese, polluted upon, incarcerated, un-banked, and without assets if I'm poor? Is poverty too hard a problem for economic analysis? These are some of the questions that a group of scholars have come together to confront in The Oxford Handbook of the Economics of Poverty. The book is written in a style that encourages the reader to think critically about poverty. Theories are presented in a rigorous but not overly technical way; concise and straightforward empirical analyses enlighten key policy issues. The volume covers topics such as poverty in the twenty-first century; labor market factors; poverty policy; poverty dynamics; the dimensions of poverty; and trends and issues in anti-poverty policy. A goal of the book is to stimulate further research on poverty. To that end, several articles challenge conventional thinking about poverty and in some cases present specific proposals for the reform of economic and social policy.
Poverty is a pressing and persistent problem. While its extent varies across countries, its presence always represents the diminution of human capacity. Therefore, it seems natural to want to do something about it. Have countries made progress in mitigating poverty? How do we determine who is poor and who is not poor? What intuitions or theories guide the design of anti-poverty policy? Is overall labor market performance the key to keeping the poverty rate low? Or, does it matter how well-connected an individual is to those who know about the availability of jobs? Does being an immigrant increase the odds of being poor? Are there anti-poverty policies that work? For whom do they work? If I'm poor, will I have access to health care and housing? Am I more likely to be obese, polluted upon, incarcerated, un-banked, and without assets if I'm poor? Is poverty too hard a problem for economic analysis? These are some of the questions that a group of scholars have come together to confront in The Oxford Handbook of the Economics of Poverty. The book is written in a style that encourages the reader to think critically about poverty. Theories are presented in a rigorous but not overly technical way; concise and straightforward empirical analyses enlighten key policy issues. The volume covers topics such as poverty in the twenty-first century; labor market factors; poverty policy; poverty dynamics; the dimensions of poverty; and trends and issues in anti-poverty policy. A goal of the book is to stimulate further research on poverty. To that end, several articles challenge conventional thinking about poverty and in some cases present specific proposals for the reform of economic and social policy.
The efficacy of the US anti poverty policy is shaped both by its reliance on categorical sorting and by its decentralized structure. To examine the implications of these features, this study introduces a novel disaggregation of poverty reduction instruments into four mechanisms: federal taxes and federal transfers (centralized) and state taxes and state transfers (decentralized). Using the Current Population Survey’s Annual Social and Economic Supplement data and a sequence-independent decomposition, this analysis assesses the relative effectiveness of the mechanisms at the national level between 1996 and 2016 and across the states in 2016. The study finds that absolute and relative poverty reduction is greater and has increased over time for working-age households with children compared with those without children. We also find cross-state variation in market- and disposable-income poverty and in the poverty reduction attributable to each of the redistributive mechanisms, highlighting the importance of examining poverty and antipoverty policy subnationally.
This study estimates the effect of the sharp reduction in Israel's child allowances in the early 2000s on female labour supply. The study uses the difference‐in‐differences method to estimate changes in the labour supply of Israeli women with more children (four or five) compared to changes in the labour supply of women with fewer children (two or three). The results show an increase of approximately 3.1 percentage points (4.4%) in the labour supply of women with four or five children, relative to that of women with two or three children. These numbers translate to an income elasticity of labour supply in the range −0.50 to −0.81. Finally, we document the heterogeneity of these effects and provide several tests of their validity.
Over the past several decades, welfare states across the developed Western world, including Israel, have adopted differential employment policies for disadvantaged marginal populations that perform poorly in the labor market and are underrepresented in it. The intensive and rapid shift from Keynesian welfare policy to a more economical and efficient neoliberal approach sparked great turbulence in Israel's labor market, leaving broad swaths of the country's marginal populations outside of the capitalistic post-scarcity economy. In this article, we examine third-sector initiatives and governmental employment policies aimed at integrating and advancing Haredim (ultra-Orthodox Jews) in the Israeli labor market. We also explore the tension between welfare, with its associated benefits and governmental assistance mechanisms, and the neoliberal approach, with its reliance on economic efficiency tests.
The article looks at how the Haredi sector's labor market integration process has evolved. We aim to understand parallel developments between the processes outlined by the state and the Haredi community's socioeconomic needs under a neoliberal regime that prizes competition, achievement, and materialism – a regime in which social institutions are being reshaped, adjusted, and disciplined in accordance with market-oriented principles. We will examine the forces working behind the scenes to integrate Haredim in the economy and in society as a whole – the top-down policy forces striving to increase Israeli economic output, and the bottom-up internal-civic forces that want to create normative and economically feasible alternatives to the Haredi “society of learners” that developed under welfare-state auspices.
The article seeks to answer three main questions in light of the aforementioned processes: How did the shift from a Keynesian welfare state to state workfare contribute to Haredi integration in the Israeli employment market? Who were the key political-social-economic actors and forces that shaped the process of Haredi labor market integration? And finally: how has neoliberal employment policy affected the Haredi community on the gender, spatial (center-periphery), class, and community planes, i.e., has this policy approach helped strengthen the Haredi middle class, and if so, how?
Reform of the U.S. welfare system in 1996 spurred claims that cuts to welfare programs effectively incentivized single mothers to find employment. It is difficult to assess the veracity of those claims, however, absent evidence of how the relationship between welfare benefits and single mother employment generalizes across countries. This study combines data from the European Union Labour Force Survey and the U.S. Current Population Survey (1992-2015) into one of the largest samples of single mothers ever, testing the relationships between welfare generosity and single mothers’ employment and work hours. We find no consistent evidence of a negative relationship between welfare generosity and single mother employment outcomes. Rather, we find tremendous cross-national heterogeneity, which does not clearly correspond to well-known institutional variations. Our findings demonstrate the limitations of single country studies and the pervasive, salient interactions between institutional contexts and social policies.
We use variation in the intergenerational persistence across social assistance benefits over 18 years to study the drivers of intergenerational disadvantage. Young people are more likely to receive social assistance if their parents received disability, caring, or single parent benefits, and less likely if they received unemployment benefits. Disparity in intergenerational persistence across benefit types suggests that parental bad luck has broader consequences for youth disadvantage than do their personal choices. Using the intensive margin and timing of parental social assistance to account for unobserved heterogeneity indicates that intergenerational disadvantage is more likely driven by poverty traps than welfare cultures.
We study the labor supply and consumption responses to cash assistance delivered through the Temporary Assistance to Needy Families (TANF) Program in the United States. Exploiting a sharp increase in cash benefit generosity for low‐income single‐parent families in New Hampshire due to a legislative revision to payment calculations, we implement difference‐in‐differences and triple‐differences to estimate the impacts of greater benefits on work behavior as well as on food expenditures and food security. Our results suggest that more generous cash assistance reduces labor supply among likely TANF‐eligible individuals. At the same time, greater cash benefits increase household food spending and reduce the incidence of food insecurity. Our findings speak to individual and family responses to expanded cash assistance in an era in which cash welfare is at historically low levels, is time limited, and imposes work requirements.
In recent decades, the use of conditionality backed by benefit sanctions for those claiming unemployment and related benefits has become widespread in the social security systems of high-income countries. Critics argue that sanctions may be ineffective in bringing people back to employment or indeed harmful in a range of ways. Existing reviews largely assess the labour market impacts of sanctions but our understanding of the wider impacts is more limited. We report results from a scoping review of the international quantitative research evidence on both labour market and wider impacts of benefit sanctions. Following systematic search and screening, we extract data for 94 studies reporting on 253 outcome measures. We provide a narrative summary, paying attention to the ability of the studies to support causal inference. Despite variation in the evidence base and study designs, we found that labour market studies, covering two thirds of our sample, consistently reported positive impacts for employment but negative impacts for job quality and stability in the longer term, along with increased transitions to non-employment or economic inactivity. Although largely relying on non-experimental designs, wider-outcome studies reported significant associations with increased material hardship and health problems. There was also some evidence that sanctions were associated with increased child maltreatment and poorer child well-being. Lastly, the review highlights the generally poor quality of the evidence base in this area, with few studies employing research methods designed to identify the causal impact of sanctions, especially in relation to wider impacts.
In Japan, the number of households targeted by employment support programs has increased rapidly since the Great Recession of 2008. This study analyzes whether these programs induce public assistance recipients to work. Drawing on a unique dataset for a representative Japanese municipality X, I estimate the program effects by using propensity score matching to address the selection bias. The analysis reveals several important findings. First, the programs raise the welfare recipients’ employment rate. Second, lock-in effects are not significantly observed in most cases. Third, the effects of the programs are not large enough to allow beneficiaries to get off welfare through employment. Finally, there is no substantial difference in the results pre- and post-matching.
This study explores the impact of work requirements for the Supplemental Nutrition Assistance Program (SNAP) on the labor supply of able-bodied adults without dependents, exploiting variation in the work exemption across areas over time as well as the age criteria for the work requirement. I find that suspending work requirements does not discourage employment; a decrease in employment of more than 1.4 percentage points among people who are potentially affected by the exemptions can be ruled out with a 95% confidence interval. I also find evidence of a reduction in hours of work among older prime-age workers due to the work exemption. Further analysis uncovers two reasons why the work exemption has little effect on employment. First, many new SNAP participants who enrolled due to the exemption are the long-term non-employed who have no labor supply to reduce. Second, the generous income deductions in benefit calculation act as a work incentive by significantly lowering the effective benefit reduction rate at very low income ($0–600). These findings indicate that the SNAP work requirement may not achieve the intended goal of promoting employment; instead it may increase the risk of disadvantaged individuals failing to receive the assistance they need.
Hispanic families have historically used means-tested assistance less than high-poverty peers, and one explanation for this may be that anti-immigrant politics and policies are a barrier to program participation. We document the participation of Hispanic children in three antipoverty programs by age and parental citizenship and the correlation of participation with state immigrant-based restrictions. Hispanic citizen children with citizen parents participate in Supplemental Nutrition Assistance Program (SNAP) and Medicaid more than Hispanic citizen children with noncitizen parents. Foreign-born Hispanic mothers use Medicaid less than their socioeconomic status would suggest. However, little evidence exists that child participation in Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) varies by mother’s nativity: foreign-born mothers of Hispanic infants participate in WIC at higher rates than U.S.-born Hispanic mothers. State policies that restrict immigrant program use correlate to lower SNAP and Medicaid uptake among citizen children of foreign-born Hispanic mothers. WIC participation may be greater because it is delivered through nonprofit clinics, and WIC eligibility for immigrants is largely unrestricted.
We review the empirical literature on the causal effects of welfare‐to‐work policies on the employment of low‐income parents and the intergenerational impacts on their children. We focus on welfare policies that change benefit levels, activity requirements, time limits, and in‐work benefits. These policies may affect children through several mechanisms, including changes in family income, time spent with parents, and attitudes towards work or welfare. To unpack these mechanisms and understand the net effects of these policies, we assess how the impact on children varies across outcomes, home environments and institutional settings. Overall, the literature shows that income tax credits are an attractive policy, simultaneously increasing employment and improving child development outcomes. In contrast, other policies that boost employment either have no or negative impacts on child development.
In the 1990s, the US safety net was substantially reformed. We ask how those reforms collectively affected early-career outcomes among youths who were teens when the reforms took effect. We consider employment, safety-net participation, marriage, and childbearing between the ages of 18 and 32. We take a difference-in-difference approach, tracking adolescents from two generations roughly 20 years apart. In each generation, we compare two groups, one of which was more likely to have been affected by safety-net reform than the other. We find evidence that safety-net reform increased women’s labor supply and decreased marriage.
This paper presents a preliminary evaluation of the Temporary Assistance to Needy Families program, that was mandated by the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), showing trends over time in wages for mothers who received welfare benefits in 1996, using the power of a longitudinal data set: a nationally representative sample of 1000 welfare mothers in the 1996 Survey of Income and Program Participation (SIPP), linked to their IRS wage records from 1996 to 2007. Only one in ten of the 1996 cohort of welfare mothers received wages that were at least 175% of the poverty line by 2007. By 2007, only one in six of those with more than a high school diploma achieved this level of economic self‐sufficiency. For all time periods, the federal Earned Income Tax Credit, had a positive impact for only the lowest wage earners, that is, with earnings below half the poverty line. Our results provide a commentary on the validity of neoliberal assumptions underlying the long‐term implementation of the PRWORA. Analyses of future SIPP panels will determine whether these trends continued.
We estimate the effects of having a child in poor health on the mother's receipt of Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), and public support in the form of food (Special Supplemental Nutrition Program for Women, Infants, and Children [WIC] or food stamps), health insurance (Medicaid), and housing. We find that mothers with unhealthy children are between 2 and 8 percentage points (8‐33%) more likely to rely on TANF than those with healthy children. There are stronger effects for mothers with older children than for those having first births. Mothers of children in poor health are also more likely than those with healthy children to receive SSI, Medicaid, and housing assistance but not WIC or food stamps. Given the restrictive new welfare environment, mothers who rely on TANF to cope with the burden of caring for unhealthy infants may soon encounter difficulties making ends meet and have insufficient resources to invest in their children's health.
This study examines the effects that labor market conditions and welfare policy changes had on single mothers' welfare participation and economic outcomes using longitudinal, individual‐level data from the 1992 and 1993 panels of the Survey of Income and Program Participation (SIPP). The study uses special versions of the SIPP panels that include state and county identifiers and links the individual information to county‐specific measures of low‐skill employment opportunities and state measures of welfare policies. It estimates transition models of program entry and exit and regression models of economic outcomes. The study finds that employment conditions and welfare benefit levels were significant determinants of single mothers' welfare participation and economic success over the period 1992‐95. However, it does not find statistically distinguishable differences in participation and economic success between states that did and did not reform their welfare programs through waivers to the federal rules.
During the late twentieth century, U.S. mothers' propensities to hold full-time jobs became increasingly unequal across the distribution of socioeconomic status (SES). Consequently, daughters in high-SES households became more likely to be raised by working mothers than daughters in low-SES households. To what extent did this unequal exposure further shape maternal employment inequality in the twenty-first century—when these daughters had grown into adults and begun to raise their own children? Leveraging the genealogical structure of the Panel Study of Income Dynamics, this article estimates intergenerational employment coefficients on a sample of late twentieth century mothers and their daughters. It documents a much stronger intergenerational relationship in high-SES families than in low-SES families. Supplementary analyses reveal that being raised by a working mother significantly reduces the motherhood employment penalty among high-SES women but not among low-SES women. Unequal rates of mother-daughter employment transmission by SES can account for 36% of growing inequality in maternal employment across SES groups, observed in the Current Population Survey, between 1999 and 2016. These findings indicate that family-level transmission processes magnify the effects of structural forces on maternal employment inequality.
Roughly 25 years ago, the US safety net was substantially reformed. Here we ask how those reforms affected the educational attainment of youths who were teens at the time those reforms took place. We take a difference-in-difference approach, following adolescents from two generations roughly 20 years apart. In each generation, we compare two groups, one which was more likely to have been affected by safety-net reform, and one which was less likely to have been affected. Under some assumptions, our approach identifies the joint, or bundled, effects of the constituent policy changes that make up safety-net reform. We find evidence that safety-net reform may have reduced educational attainment for women, and had small positive effects on education for men. We offer suggestions as to why our findings differ from those of previous studies of the components of safety net reform.
With limited federal requirements for block grants, states have developed very different welfare policies, often with onerous recertification or reporting requirements, creating barriers to continuous program enrollment. Examined through the framework of Administrative Burden, our study examines how changes to burdensome policies in states’ Child Care Development Fund (CCDF) programs affect the length of children’s continuous enrollment in child care through the CCDF program, known as subsidy “spells.” We exploit state-level changes in three key policies during a 10-year period (2004-2013) that capture administrative burden: (1) length of eligibility redetermination; (2) reporting requirements for income changes; and (3) grace period for care before termination. Using state fixed effects analyses in a sample of 38 states using data from the Administration for Children and Families and multiple other sources, we find that administrative burdens meaningfully and robustly affect continuous enrollment in CCDF; switching to a 12-month redetermination period, as required 2014 Child Care and Development Block Grant reauthorization, increases children’s continuous enrollment in CCDF care (i.e., state median spell length) by 30 percent. In contrast, requiring all changes in family income to be reported while enrolled in CCDF decreases spell length by seven percent. Results underscore the importance of reducing administrative burdens related to compliance costs to better support low-income citizens, especially those with young children, and improve child development.
We investigate how welfare reform in the U.S. in the 1990s shaped the age gradient in women’s property crime arrests. Using Federal Bureau of Investigation data, we investigated the age-patterning of effects of welfare reform on women’s arrests for property crime, the type of crime that welfare reform has been shown to affect. We found that welfare reform reduced women’s property crime arrests by about 4%, with particularly strong effects for women ages 25 to 29, slightly stronger effects in states with stricter work incentives, and much stronger effects in states with high per capita criminal justice expenditures.
This study assesses the impact of South Carolina’s Temporary Assistance for Needy Families (TANF) program, Family Independence (FI), on the longitudinal earnings of three cohorts of new entrants who entered the study before, at the beginning of, and at the height of the 2007-2009 recession. Applicants who began the application process but did not enroll in TANF were propensity-score matched to entrants by background characteristics including pre-intervention earnings history, and served as the comparison group. We constructed a latent growth curve model to test whether earnings histories were similar for the program and comparison groups up until FI intake, to estimate program impact by comparing post-intake earnings of program participants to those of the comparison group, and to determine the statistical significance of cohort differences in program impact. The findings showed FI had a positive impact on the earnings of participants before the recession. The effect became weaker during the state’s period of rising unemployment, and disappeared during the worst economic recession in decades. This study demonstrates the usefulness of longitudinal administrative data, propensity score matching, and latent growth modeling techniques for evaluating the impact of program interventions.
This research paper addresses how changes in Ontario’s income assistance (IA) funding model affected employment success rates of IA clients over time and between regions. I use a multilevel logistic regression model to analyze variables coded from administrative and census data. The results show that there have been significant decreases in employment success rates across Ontario regions since the 1995 download of social services to municipalities. The discussion addresses key policy implications as a result of this analysis, specifically in favor of a standardized model of social service delivery.
We investigate the gap in welfare use between immigrants and natives over a 24-year period using the Annual Social and Economic Supplement of the Current Population Survey from 1995 to 2018, spanning periods of economic recessions and recoveries, changes in welfare policy regimes, and policies towards immigrants. A novel contribution of our research is to adopt the Oaxaca–Blinder decomposition analysis to study the effects of demographic factors, macroeconomic trends and policy on welfare use gap between immigrants and natives. Our analysis leads to three main findings: one, if immigrants had the same demographic characteristics as natives their participation in means-tested programs would have been much less overall and much below those of natives. This finding holds true across broader measures of welfare receipt capturing cash and near cash programs and health insurance as well as participation in five specific safety net programs. It also holds true across periods of economic recessions and recovery. Second, we find evidence that the business cycle impacts immigrant and native welfare participation differently. Immigrant participations in Temporary Assistance to Needy Families, Supplemental Nutritional Assistance Program and State Children’s Health Insurance Program are more sensitive to the business cycle than native participations. Three, we find that changes in program eligibility explain only a modest proportion of the immigrant-native gap in welfare use. A possible explanation for this finding is that changes in eligibility rules have affected only specific immigrant populations (e.g. new immigrants) whereas our analysis pertains to all immigrants.
Government officials like the idea of just a small number of households in their respective jurisdiction receiving social assistance. A large number is seen as costly to the public treasury, and declining caseloads are generally viewed as a mark of success for both the economy and the government of the day. But what factors account for the size of a Canadian province's social assistance caseload? This article aims to shed light on this question, with a focus on single adults without dependants (and without serious disabilities) during the 1989–2017 period. One important finding is that when the value of social assistance benefit levels for this group increases by 1% in a province, the social assistance caseload for this demographic rises by 0.457%. Put differently, there is indeed an important behavior response associated with higher benefit levels. In response, we propose that provincial officials budget for higher take up levels when they increase benefit levels for this household group.
Welfare reform brought on by the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 has been the object of considerable debate and scholarship. This paper shows impact over time in employment for a nationally representative sample of welfare mothers only who received welfare benefits in 1996, using the 1996 Survey of Income and Program Participation (SIPP), linked to ten years of their IRS wage records. In 1996, nearly half of them worked for wages. The vast majority had attained a high school diploma or less. Almost a fifth reported a severe disability and either fair or poor health. In 1997, the PRWORA was implemented for the entire U.S. That year, nearly three-fifths had paid employment. Nearly three-quarters received wages by 2000. After the recession of 2001, receipt of wages decreased. By 2007, receipt of wages was back to the 1997 level. Health, age, education, and work history of these mothers impacted receipt of wages as expected, but not car ownership and number of children. Our longitudinal data demonstrate the impact of business cycles as well as health, age, education, and work history to determine paid employment outcomes. Analyses of future SIPP panels will determine whether these trends continued.
This paper estimates neighborhood effects on adult labor market outcomes using the Moving to Opportunity (MTO) housing mobility experiment. We propose and implement a new strategy for identifying transition-specific effects that exploits identification of the unobserved component of a neighborhood choice model. Estimated Local Average Treatment Effects (LATEs) are large, result from moves between the first and second deciles of the national distribution of neighborhood quality, and pertain to a subpopulation of nine percent of program participants.
en I examine the effect of transitioning from welfare to full‐time employment on a variety of measures of subjective well‐being for a sample of long‐term welfare recipients in British Columbia and New Brunswick who participated in the Self‐Sufficiency Project (SSP). Individuals randomly assigned to the treatment group could receive a generous time‐limited earnings supplement if they found full‐time work. I use random assignment to estimate the local average treatment effect of working full time on well‐being. For the complier subpopulation, I find large, positive effects on subjective well‐being that persist over the longer run for New Brunswick and through roughly three years for British Columbia. Policy changes made during the experiment may explain the provincial differences.
Résumé
fr De l’aide sociale au travail et bien‐être subjectif : l’exemple d’un échantillon aléatoire et contrôlé. Dans cet article, j’étudie les effets du passage de l’aide sociale au travail à temps plein sur un ensemble de mesures de bien‐être subjectif au sein d’un panel d’allocataires sociaux de longue durée ayant participé au Projet d’autosuffisance (PAS) en Colombie‐Britannique et au Nouveau‐Brunswick. Les participants au projet, intégrés au groupe expérimental de façon aléatoire, pouvaient bénéficier de compléments de revenus généreux et limités dans le temps à condition de trouver un emploi à temps plein. Afin d’évaluer l’effet de traitement moyen local du travail à plein temps sur le bien‐être, j’ai utilisé la technique d’affectation aléatoire. Pour le sous‐groupe ayant retrouvé un travail à temps plein, les effets positifs sur le bien‐être sont importants et persistent de manière durable au Nouveau‐Brunswick tandis qu’ils ne durent qu’environ trois ans en Colombie‐Britannique. Les changements de politiques au cours de l’expérience peuvent expliquer les différences entre les deux provinces.
The paper evaluates the distributional effects on earnings and income of requiring young welfare recipients to fulfill conditions related to work and activation. It exploits within-social insurance office variation in policy arising from a geographically staggered reform in Norway. The reform reduced welfare uptake and for women had large, positive effects in the lower part of the earnings distribution. The effect on the distribution of total income is also positive, thus gains in earnings more than offset reduced welfare benefits. Fewer welfare payments and smaller caseloads make the policy highly cost-effective.
This paper seeks to identify factors which could plausibly have led to the contractionary welfare reform initiatives begun at the state and federal levels in the U.S. in the 1990s, initiatives concentrated on the AFDC program. A review of aggregate time series evidence, cross-section regression research, and studies of attitudes toward welfare spending and toward welfare recipients suggests a role for three types of factors. First, a major expansion of the U.S. welfare system in the late 1980s in terms of expenditures and caseloads may have led voters to desire to retrench by cutting back on the AFDC program, even though that program was not primarily responsible for the expansion. Second, declines in the relative and absolute levels of household income, wages, and employment rates among the disadvantaged population may have driven up caseloads and costs, increased the social distance of voters from the poor, heightened concern with work incentives, and may have led, more generally, to a decrease in the perceived deservingness of the poor. Third, a surge of births to unmarried mothers in the 1980s is suggested, by cross-sectional and attitudinal evidence, to have led to a reduction in voter support for the AFDC program. Copyright Kluwer Academic Publishers 1999
Both the FoodStamp Program (FSP) and Aid to Families with Dependent Children (AFDC) saw unprecedentedcaseloadgrowth from the late 1980s until 1994, followed by caseloadd eclines in the following years. These rapidcaseloadd eclines are attributed to changing macroeconomic conditions and to substantial changes in program design. First, in the early 1990s, states appliedfor waivers from federal welfare program regu- lations, which allowedthem more freed om to experiment with welfare reforms. Then, in 1996, Congress redesigned the federal safety net for low-income Americans through the Personal Responsibility andWork Opportu- nity Reconciliation Act (PRWORA). These real-worldd evelopments suggest some research questions. Do macroeconomic conditions affect FSP caseloads and cash wel- fare program caseloads in the same way? Do policy changes in cash programs affect par- ticipation in the FSP, which serves a partly overlapping population? Because caseload changes depend directly on the rates at which people enter andexit each program, it is use- ful in answering these questions to investi- gate participation transitions at the individual level. This paper uses data from the Panel Study of Income Dynamics (PSID) to inves- tigate participation transitions from year to year during the "waiver period," from 1989 to 1996. The distinctive feature of the approach here is that it considers all possi- ble transitions at the individual level among three participation states—AFDC (with or without FSP), FSP Only, and Neither— rather than treating each program separately.
The impact of policy changes on the local delivery of services has been overlooked in several decades of largely unsuccessful efforts to “reform” welfare. This article uses one case of state-level welfare reform in the early 1990s to examine the implementation of policy changes in local welfare offices. Direct observation of transactions between welfare workers and clients suggests that policy reforms were not fully implemented by street-level bureaucrats. The instrumental transactions that continued to dominate interactions with clients were consistent with processing claims and rationing scarce resources, but they were poorly aligned with new policies aimed at changing the services and message delivered to welfare clients. The failure to fully implement reforms on the frontlines has implications for the achievement of policy objectives and for equity in service provision. Implementation issues will have even greater urgency as welfare is devolved from federal to state governments.
This article presentsevidence on the employment effects of recent minimum wage increases from a prespecified research design that entailed committing to a detailed set of statistical analyses prior to “going to” the data. The limited data to which the prespecified research design can be applied may preclude finding many significant effects. Nonetheless, the evidence is most consistent with disemployment effects of minimum wages for younger, less-skilled workers.
Even before the 1996 overhaul of the U.S. welfare system, a number of states had ended the practice of paying extra benefits to families who have additional children while receiving welfare. Proponents believe that this reform can reduce births to recipients, however many worry that it may encourage women to obtain abortions. Using a sample of unmarried AFDC recipients from the NLSY, we estimate a bivariate probit model of pregnancy and, conditional on becoming pregnant, the probability of abortion. Our results lend some support for the proposition that reducing incremental AFDC benefits will decrease pregnancies without increasing abortions.
The continuing debate over the cause of the precipitous 1994-1998 decline in welfare caseloads is fueled by the ambiguity of evaluation results that attempt to disentangle cyclical and programmatic effects. One reason for this uncertainty is the lack of homogeneity across jurisdictions in the content, timing, and enforcement of welfare-reform parameters. This paper attempts to incorporate interjurisdictional variation in program content and enforcement into the standard evaluation model. The results suggest that state initiatives do reduce Aid for Families with Dependent Children caseloads but that all of the aggregate impact derives from a few "tough" provisions that limit welfare access. Variation in local enforcement of exemption and participation rules are also shown to have significant caseload effects. Copyright 1999 by Oxford University Press.
Since 1994 there has been an unprecedented decline in the number of people receving food stamp benefits. From a record high of 27.5 million in 1994, the number of food stamp recipients fell over 30% to 18.0 million by mid 1999. Innovative changes in the delivery of food stamp benefits have been taking place with the introduction of Electronic Benefit Transfers (EBT). That these many economic and policy changes occurred at the same time as the substantial caseload decline suggests that a combination of factors led to the decline, but their simultaneity confounds the ability of the researcher to easily decompose the caseload decline. In this research we attempt to quantify the relative impacts of the macroeconomy and welfare reform on food stamp caseloads.