IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v32y2014i2p306-333.html
   My bibliography  Save this article

The Effect Of Welfare Asset Rules On Auto Ownership, Employment, And Welfare Participation: A Longitudinal Analysis

Author

Listed:
  • LORIEN RICE
  • CYNTHIA BANSAK

Abstract

type="main" xml:lang="en"> This paper investigates how asset tests for welfare eligibility affect auto ownership, employment, and welfare participation for single mothers without a college degree. We combine longitudinal data from the 1996 Survey of Income and Program Participation with data on state-level welfare program rules from the Urban Institute and data on state-level controls to test whether these single mothers were more likely to (1) own a car, (2) be employed, and (3) be off of welfare, depending on the welfare asset rules instituted in their state. We find evidence that, taken as a group, the asset rules have a statistically significant effect on the probability of car ownership. Ordinary least squares results and cross-sectional two-stage least squares (2SLS) results using the asset rules to instrument for car ownership show a large, positive, statistically significant effect of car ownership on employment. However, in 2SLS models controlling for prior car ownership and prior employment, the asset instruments are weaker and we do not find an effect of car ownership on employment. Of significance for policy makers, we find that the asset rules do not have a statistically significant joint effect on welfare participation, even after addressing possible endogeneity. (JEL I38, J68, J08)

Suggested Citation

  • Lorien Rice & Cynthia Bansak, 2014. "The Effect Of Welfare Asset Rules On Auto Ownership, Employment, And Welfare Participation: A Longitudinal Analysis," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 306-333, April.
    • Handle: RePEc:bla:coecpo:v:32:y:2014:i:2:p:306-333
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/coep.12019
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hubbard, R Glenn & Skinner, Jonathan & Zeldes, Stephen P, 1995. "Precautionary Saving and Social Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 360-399, April.
    2. Lara Shore-Sheppard, 1996. "The Precision of Instrumental Variables Estimates With Grouped Data," Working Papers 753, Princeton University, Department of Economics, Industrial Relations Section..
    3. Erik Hurst & James P. Ziliak, 2006. "Do Welfare Asset Limits Affect Household Saving?: Evidence from Welfare Reform," Journal of Human Resources, University of Wisconsin Press, vol. 41(1).
    4. Jeffrey Grogger, 2003. "The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 394-408, May.
    5. Yunju Nam, 2008. "Welfare Reform and Asset Accumulation: Asset Limit Changes, Financial Assets, and Vehicle Ownership," Social Science Quarterly, Southwestern Social Science Association, vol. 89(1), pages 133-154, March.
    6. Jeffrey Grogger, 2004. "Time Limits and Welfare Use," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    7. Marilyn Lucas & Charles Nicholson, 2003. "Subsidized vehicle acquisition and earned income in the transition from welfare to work," Transportation, Springer, vol. 30(4), pages 483-501, November.
    8. James X. Sullivan, 2006. "Welfare Reform, Saving, and Vehicle Ownership: Do Asset Limits and Vehicle Exemptions Matter?," Journal of Human Resources, University of Wisconsin Press, vol. 41(1).
    9. Raphael, Steven & Rice, Lorien, 2002. "Car ownership, employment, and earnings," Journal of Urban Economics, Elsevier, vol. 52(1), pages 109-130, July.
    10. Baum, Charles L., 2009. "The effects of vehicle ownership on employment," Journal of Urban Economics, Elsevier, vol. 66(3), pages 151-163, November.
    11. Lara D. Shore-Sheppard, 1996. "The Precision of Instrumental Variables Estimates With Grouped Data," Working Papers 753, Princeton University, Department of Economics, Industrial Relations Section..
    12. Blumenberg, Evelyn & Hess, Daniel Baldwin, 2002. "Measuring the Role of Transportation in Facilitating the Welfare-to-Work Transition: Evidence from Three California Counties," University of California Transportation Center, Working Papers qt2ww4c93w, University of California Transportation Center.
    13. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    14. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    15. Gurley, Tami & Bruce, Donald, 2005. "The effects of car access on employment outcomes for welfare recipients," Journal of Urban Economics, Elsevier, vol. 58(2), pages 250-272, September.
    16. Powers, Elizabeth T., 1998. "Does means-testing welfare discourage saving? evidence from a change in AFDC policy in the United States," Journal of Public Economics, Elsevier, vol. 68(1), pages 33-53, April.
    17. Blumenberg, Evelyn A. & Hess, Daniel Baldwin, 2002. "Measuring the Role of Transportation in Facilitating the Welfare-to-Work Transition: Evidence from Three California Counties," University of California Transportation Center, Working Papers qt6pv0q9qq, University of California Transportation Center.
    18. Jeffrey Grogger, 2002. "The Behavioral Effects of Welfare Time Limits," American Economic Review, American Economic Association, vol. 92(2), pages 385-389, May.
    19. repec:fth:prinin:374 is not listed on IDEAS
    20. Paul M. Ong, 2002. "Car ownership and welfare-to-work," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(2), pages 239-252.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leah Hamilton & David Rothwell & Jin Huang & Yunju Nam & Taylor Dollar, 2019. "Guarding Public Coffers or Trapping the Poor? The Role of Public Assistance Asset Limits in Program Efficacy and Family Economic Well‐Being," Poverty & Public Policy, John Wiley & Sons, vol. 11(1-2), pages 12-30, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Baum, Charles L., 2009. "The effects of vehicle ownership on employment," Journal of Urban Economics, Elsevier, vol. 66(3), pages 151-163, November.
    2. Miwa Matsuo & Hiroyuki Iseki, 2020. "Giving up Job Search Because I Don't Have a Car: Labor Market Participation and Employment Status Among Single Mothers With and Without Cars," Discussion Paper Series DP2020-07, Research Institute for Economics & Business Administration, Kobe University.
    3. Jessica E Todd & Young Jo & James Richard Boohaker, 2019. "The Impact of Supplemental Nutrition Assistance Program Policies on Asset Holdings," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(2), pages 305-328, June.
    4. Deokrye Baek & Christian Raschke, 2016. "The Impact of SNAP Vehicle Asset Limits on Household Asset Allocation," Southern Economic Journal, John Wiley & Sons, vol. 83(1), pages 146-175, July.
    5. Leah Hamilton & Ben Alexander-Eitzman & Whitney Royal, 2015. "Shelter From the Storm," SAGE Open, , vol. 5(1), pages 21582440155, February.
    6. Blumenberg, Evelyn & Pierce, Gregory, 2017. "Car access and long-term poverty exposure: Evidence from the Moving to Opportunity (MTO) experiment," Journal of Transport Geography, Elsevier, vol. 65(C), pages 92-100.
    7. Leah Hamilton & David Rothwell & Jin Huang & Yunju Nam & Taylor Dollar, 2019. "Guarding Public Coffers or Trapping the Poor? The Role of Public Assistance Asset Limits in Program Efficacy and Family Economic Well‐Being," Poverty & Public Policy, John Wiley & Sons, vol. 11(1-2), pages 12-30, July.
    8. Gautier, Pieter A. & Zenou, Yves, 2010. "Car ownership and the labor market of ethnic minorities," Journal of Urban Economics, Elsevier, vol. 67(3), pages 392-403, May.
    9. Karadja, Mounir & Sundberg, Anton, 2023. "The labor market impact of a taxi driver’s license," Working Paper Series 2023:6, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    10. Michael J. Smart & Nicholas J. Klein, 2020. "Disentangling the role of cars and transit in employment and labor earnings," Transportation, Springer, vol. 47(3), pages 1275-1309, June.
    11. Gurley, Tami & Bruce, Donald, 2005. "The effects of car access on employment outcomes for welfare recipients," Journal of Urban Economics, Elsevier, vol. 58(2), pages 250-272, September.
    12. Thakuriah (Vonu), Piyushimita & Persky, Joseph & Soot, Siim & Sriraj, P.S., 2013. "Costs and benefits of employment transportation for low-wage workers: An assessment of job access public transportation services," Evaluation and Program Planning, Elsevier, vol. 37(C), pages 31-42.
    13. Cho, Heepyung, 2022. "Driver’s license reforms and job accessibility among undocumented immigrants," Labour Economics, Elsevier, vol. 76(C).
    14. Klein, Nicholas J. & Tran, Minh & Riley, Sarah, 2020. "“Desperately Need a Car”: Analyzing Crowdfunding Campaigns for Car Purchases and Repairs on Gofundme.com," SocArXiv 8x7d2, Center for Open Science.
    15. Le Gallo, Julie & L'Horty, Yannick & Petit, Pascale, 2017. "Does enhanced mobility of young people improve employment and housing outcomes? Evidence from a large and controlled experiment in France," Journal of Urban Economics, Elsevier, vol. 97(C), pages 1-14.
    16. , 2022. "Means-Tested Transfers, Asset Limits, and Universal Basic Income," Economic Commentary, Federal Reserve Bank of Cleveland, vol. 2022(10), pages 1-8, August.
    17. Dagney Faulk & Michael Hicks, 2010. "The Economic Effects of Bus Transit in Small Cities," Public Finance Review, , vol. 38(5), pages 513-539, September.
    18. David Figlio & Jens Ludwig, 2012. "Sex, Drugs, and Catholic Schools: Private Schooling and Non-Market Adolescent Behaviors," German Economic Review, Verein für Socialpolitik, vol. 13(4), pages 385-415, November.
    19. Julie Le Gallo & Yannick L'Horty & Pascale Petit, 2014. "Does subsidising young people to learn to drive promote social inclusion? Evidence from a large controlled experiment in France," TEPP Working Paper 2014-15, TEPP.
    20. Denis Anne & Julie Le Gallo & Yannick L’Horty, 2020. "Faciliter la mobilité quotidienne des jeunes éloignés de l’emploi : une évaluation expérimentale," Revue d'économie politique, Dalloz, vol. 130(4), pages 519-544.

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:coecpo:v:32:y:2014:i:2:p:306-333. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.