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The effect of welfare reform and technological change on unemployment

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Author Info
Jason L. Saving
Abstract

Unemployment has fallen to its lowest level in a generation. Some welcome this development because they believe it increases the average person's ability to achieve the American dream. Others view low unemployment as a precursor to dire economic consequences. Jason Saving examines the issue of unemployment and reaches three main conclusions. First, welfare reform can significantly reduce unemployment, and the empirical evidence to date suggests the recent American welfare reform effort has caused hundreds of thousands of Americans to leave the welfare rolls and enter the labor force. Second, welfare reform can increase the official unemployment rate, but it cannot increase the number of people who are out of work. Finally, technological change can help low-skilled or disabled individuals become productive members of the labor force, and there is reason to believe it has done so during the 1990s.

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File URL: http://www.dallasfed.org/research/efr/2000/efr0002c.pdf
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Article provided by Federal Reserve Bank of Dallas in its journal Economic and Financial Policy Review.

Volume (Year): (2000)
Issue (Month): Q2 ()
Pages: 26-34
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Handle: RePEc:fip:fedder:y:2000:i:q2:p:26-34

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Hadar, Josef & Russell, William R, 1969. "Rules for Ordering Uncertain Prospects," American Economic Review, American Economic Association, vol. 59(1), pages 25-34, March. [Downloadable!] (restricted)
  2. Robins, Philip K, 1986. "Child Support, Welfare Dependency, and Poverty," American Economic Review, American Economic Association, vol. 76(4), pages 768-88, September. [Downloadable!] (restricted)
  3. W. Michael Cox & Richard Alm, 1995. "By our own bootstraps: economic opportunity and the dynamics of income distribution," Annual Report, Federal Reserve Bank of Dallas, pages 2-24. [Downloadable!]
  4. Fraker, Thomas & Moffitt, Robert, 1988. "The effect of food stamps on labor supply : A bivariate selection model," Journal of Public Economics, Elsevier, vol. 35(1), pages 25-56, February. [Downloadable!] (restricted)
  5. Mortensen, Dale T & Pissarides, Christopher A, 1994. "Job Creation and Job Destruction in the Theory of Unemployment," Review of Economic Studies, Blackwell Publishing, vol. 61(3), pages 397-415, July. [Downloadable!] (restricted)
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  6. Evan F. Koenig, 1998. "What's new about the new economy? : some lessons from the current expansion," The Southwest Economy, Federal Reserve Bank of Dallas, issue Jul, pages 7-11. [Downloadable!]
  7. Shroder, Mark, 1995. "Games the States Don't Play: Welfare Benefits and the Theory of Fiscal Federalism," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 183-91, February. [Downloadable!] (restricted)
  8. Hosek, James R, 1980. "Determinants of Family Participation in the AFDC-Unemployed Fathers Program," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 466-70, August. [Downloadable!] (restricted)
  9. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September. [Downloadable!] (restricted)
  10. Pissarides, Christopher A, 1994. "Search Unemployment with On-the-Job Search," Review of Economic Studies, Blackwell Publishing, vol. 61(3), pages 457-75, July. [Downloadable!] (restricted)
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  1. Bharat Trehan, 2001. "Unemployment and productivity," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue Oct 12. [Downloadable!]
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