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The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families

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Author Info
Jeffrey Grogger (UCLA and NBER)

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Abstract

Of all of the welfare reforms that were implemented during the 1990s, time limits may represent the single greatest break from past policy. This paper expands on what is known about this important welfare reform measure by exploiting the predictions from Grogger and Michalopoulos (2003) to estimate the effects of time limits on welfare use, employment, labor supply, earnings, and income among female-headed families. Results based on data from the March Current Population Survey suggest that time limits have had important effects on welfare use and work, accounting for about one-eighth of the decline in welfare use and about 7% of the rise in employment since 1993. They have had no significant effect on earnings or income, however. The analysis also shows that the collective effects of other reforms have had important impacts on employment and labor supply. Furthermore, it identifies the Earned Income Tax Credit (EITC) as a particularly important contributor to both the recent decrease in welfare use and the recent increase in employment, labor supply, and earnings. Copyright (c) 2003 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/003465303765299891
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Publisher Info
Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 85 (2003)
Issue (Month): 2 (02)
Pages: 394-408
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Handle: RePEc:tpr:restat:v:85:y:2003:i:2:p:394-408

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  1. Marianne Bitler & Jonah Gelbach & Hilary Hoynes, 2003. "What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments," NBER Working Papers 10121, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Chris M. Herbst & Erdal Tekin, 2008. "Child Care Subsidies and Child Development," NBER Working Papers 14474, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Robert J. Lemke & Robert J. Witt & Ann Dryden Witte, 2004. "The Transition from Welfare to Work," Department of Economics Discussion Papers 0504, Department of Economics, University of Surrey. [Downloadable!]
    Other versions:
  4. Hirasuna, Donald P. & Stinson, Thomas F., 2004. "Urban And Rural Differences In Utilization Of State Earned Income Tax Credit Programs: Minnesota'S Experience," Working Papers 18912, Oregon State University, Rural Poverty Research Center (RPRC). [Downloadable!]
  5. Maria Cancian & Arik Levinson, 2005. "Labor Supply Effects of the Earned Income Tax Credit: Evidence from Wisconsin Supplemental Benefit for Families with Three Children," NBER Working Papers 11454, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. David Blau & Erdal Tekin, 2007. "The determinants and consequences of child care subsidies for single mothers in the USA," Journal of Population Economics, Springer, vol. 20(4), pages 719-741, October. [Downloadable!] (restricted)
  7. Erdal Tekin, 2004. "Single Mothers Working at Night: Standard Work, Child Care Subsidies, and Implications for Welfare Reform," NBER Working Papers 10274, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Wolfgang Ochel, 2004. "Welfare Time Limits in the United States – Experiences with a New Welfare-to-Work Approach," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  9. V. Joseph Hotz & John Karl Scholz, 2006. "Examining the Effect of the Earned Income Tax Credit on the Labor Market Participation of Families on Welfare," NBER Working Papers 11968, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Akinori Tomohara & Ho Lee, 2007. "Did State Children’s Health Insurance Program Affect Married Women’s Labor Supply?," Journal of Family and Economic Issues, Springer, vol. 28(4), pages 668-683, December. [Downloadable!] (restricted)
  11. Ellen Meara & Richard Frank, 2006. "Welfare Reform, Work Requirements, and Employment Barriers," NBER Working Papers 12480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Robert I. Lerman & Kelly S. Mikelson, 2004. "Examining the Relationship between the EITC and Food Stamp Program Participation Among Households with Children," Econometric Society 2004 North American Summer Meetings 190, Econometric Society. [Downloadable!]
  13. Hal Snarr & Dan Axelsen, 2008. "Are Welfare Eligible Households Forward Looking?," Economics Bulletin, Economics Bulletin, vol. 9(8), pages 1-9. [Downloadable!]
  14. Myles, John F. & Hou, Feng & Picot, Garnett & Myers, Karen, 2008. "The Demographic Foundations of Rising Employment and Earnings Among Single Mothers in Canada and the United States, 1980 to 2000," Analytical Studies Branch Research Paper Series 2008305e, Statistics Canada, Analytical Studies Branch. [Downloadable!]
  15. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," NBER Working Papers 8983, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  16. Jesse Rothstein, 2005. "The Mid-1990s EITC Expansion: Aggregate Labor Supply Effects and Economic Incidence," Working Papers 883, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  17. Jeffrey Grogger, 2003. "Welfare Transitions in the 1990s: The Economy, Welfare Policy, and the EITC," NBER Working Papers 9472, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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