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The Impact of Earnings Disregards on the Behavior of Low‐Income Families

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  • Jordan D. Matsudaira
  • Rebecca M. Blank

Abstract

This paper investigates the impact of changes in earnings disregards for welfare assistance received by single mothers following welfare reform in 1996. Some states adopted much higher earnings disregards (women could work full time and still receive welfare), while other states did not. We explore the effect of these changes on women's labor supply and income using several data sources and multiple estimation strategies. Our results indicate these changes had little effect on labor supply or income. We show this is because few women used these earnings disregards. This is surprising and we discuss why this might occur.

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File URL: http://hdl.handle.net/10.1002/pam.2014.33.issue-1
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

Volume (Year): 33 (2014)
Issue (Month): 1 (01)
Pages: 7-35

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Handle: RePEc:wly:jpamgt:v:33:y:2014:i:1:p:7-35

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Web page: http://www3.interscience.wiley.com/journal/34787/home

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  1. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," NBER Working Papers 8983, National Bureau of Economic Research, Inc.
  2. Blank, Rebecca M., 2002. "Can equity and efficiency complement each other?," Labour Economics, Elsevier, vol. 9(4), pages 451-468, September.
  3. Bruce D. Meyer, 2002. "Labor Supply at the Extensive and Intensive Margins: The EITC, Welfare, and Hours Worked," American Economic Review, American Economic Association, vol. 92(2), pages 373-379, May.
  4. Bruce D. Meyer & Dan T. Rosenbaum, 1998. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," JCPR Working Papers 32, Northwestern University/University of Chicago Joint Center for Poverty Research.
  5. Alan J. Auerbach & Joel Slemrod, 1997. "The Economic Effects of the Tax Reform Act of 1986," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 589-632, June.
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Cited by:
  1. Lucie Schmidt, 2013. "The New Safety Net? Supplemental Security Income after Welfare Reform," Department of Economics Working Papers 2013-07, Department of Economics, Williams College.

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