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The effect of transfer payments on the labor supply of single mothers

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  • Frish, Roni
  • Zussman, Noam
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    Abstract

    The Single Parent Family Law came into effect in Israel in 1992. It increased the income maintenance allowance paid to single mothers who have little or no income. In order to identify the effect of this legislative change on the labor supply of single mothers, the study uses a unique panel containing rich socioeconomic data. Applying a variety of econometric methods (difference-in-differences, panel regressions and propensity score matching), the study found that following the enactment of the law the labor supply of uneducated single mothers fell by about 10%, due to a decrease in the employment rate and working hours. However, from an economic perspective, the effect of the Law on the labor supply of single mothers is not very significant.

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    Bibliographic Info

    Article provided by Elsevier in its journal The Journal of Socio-Economics.

    Volume (Year): 37 (2008)
    Issue (Month): 2 (April)
    Pages: 627-643

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    Handle: RePEc:eee:soceco:v:37:y:2008:i:2:p:627-643

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    Web page: http://www.elsevier.com/locate/inca/620175

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    1. Bruce D. Meyer & Dan T. Rosenbaum, 1999. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," NBER Working Papers 7363, National Bureau of Economic Research, Inc.
    2. Dehejia, R.H. & Wahba, S., 1998. "Propensity Score Matching Methods for Non-Experimental Causal Studies," Discussion Papers 1998_02, Columbia University, Department of Economics.
    3. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
    4. Heckman, James J & Ichimura, Hidehiko & Todd, Petra, 1998. "Matching as an Econometric Evaluation Estimator," Review of Economic Studies, Wiley Blackwell, vol. 65(2), pages 261-94, April.
    5. Francine D. Blau & Lawrence M. Kahn & FJane Waldfogel, 2004. "The Impact of Welfare Benefits on Single Motherhood and Headship of Young Women: Evidence from the Census," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    6. Gonzalez, Libertad, 2004. "Single Mothers and Work," IZA Discussion Papers 1097, Institute for the Study of Labor (IZA).
    7. Paul Gregg & Susan Harkness, 2003. "Welfare Reform and Lone Parents Employment in the UK," The Centre for Market and Public Organisation 03/072, Department of Economics, University of Bristol, UK.
    8. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
    9. Denise J. Doiron, 2004. "Welfare Reform and the Labour Supply of Lone Parents in Australia: A Natural Experiment Approach," The Economic Record, The Economic Society of Australia, vol. 80(249), pages 157-176, 06.
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