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Spillover Effects of Welfare Reforms in State Labor Markets

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  • Timothy J. Bartik

Abstract

This paper estimates the effects of welfare reforms on a state’s employment and wage rates. Welfare reforms include: pushing welfare recipients into the labor force, financial incentives to recipients for working, wage subsidies to employers of recipients, and community service jobs for recipients. The effects of these policies are analyzed using a newly estimated model of state labor markets. Simulations show that jobs found by welfare reform participants cause sizable displacement effects for nonparticipants. Displacement effects of labor supply policies are highest when a state’s unemployment is high, whereas displacement effects of labor demand policies are highest when a state’s unemployment is low.

Suggested Citation

  • Timothy J. Bartik, 2002. "Spillover Effects of Welfare Reforms in State Labor Markets," Journal of Regional Science, Wiley Blackwell, vol. 42(4), pages 667-701.
    • Handle: RePEc:bla:jregsc:v:42:y:2002:i:4:p:667-701
    DOI: 10.1111/1467-9787.00277
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    Cited by:

    1. repec:rri:wpaper:200408 is not listed on IDEAS
    2. Peter Schaeffer & Tesfa Gebremedhin, 2004. "Labor Market Size and Unemployment Duration: A Theoretical Note," Working Papers Working Paper 2004-08, Regional Research Institute, West Virginia University, revised 21 Mar 2007.
    3. Peter B. Dixon & Maureen T. Rimmer, 2005. "The Displacement Effect of Labour-Market Programs: Estimates from the MONASH Model," Centre of Policy Studies/IMPACT Centre Working Papers g-154, Victoria University, Centre of Policy Studies/IMPACT Centre.
    4. Brian C. Hill & Matthew N. Murray, 2008. "Interactions Between Welfare Caseloads And Local Labor Markets," Contemporary Economic Policy, Western Economic Association International, vol. 26(4), pages 539-554, October.
    5. repec:rre:publsh:v:39:y:2009:i:3:p:287-95 is not listed on IDEAS
    6. Robert Pollin & Jeannette Wicks-Lim & Heidi Garrett-Peltier, 2009. "Green Prosperity: How Clean-Energy Policies Can Fight Poverty and Raise Living Standards in the United States," Published Studies green_prosperity, Political Economy Research Institute, University of Massachusetts at Amherst.
    7. Andrés Rodríguez-Pose & Vassilis Tselios, 2012. "Welfare Regimes and the Incentives to Work and Get Educated," Environment and Planning A, , vol. 44(1), pages 125-149, January.

    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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