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What Mean Impacts Miss:Distributional Effects of Welfare Reform Experiments

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  • Hilary W. Hoynes
  • Marianne P Bitler
  • Jonah Gelbach

    (Department of Economics, University of California Davis)

Abstract

Labor supply theory predicts systematic heterogeneity in the impact of recent welfare reforms on earnings, transfers, and income. Yet most welfare reform research focuses on mean impacts. We investigate the importance of heterogeneity using random-assignment data from Connecticut's Jobs First waiver, which features key elements of post-1996 welfare programs. Estimated quantile treatment effects exhibit the substantial heterogeneity predicted by labor supply theory. Thus mean impacts miss a great deal. Looking separately at samples of dropouts and other women does not improve the performance of mean impacts. We conclude that welfare reform's effects are likely both more varied and more extensive than has been recognized.

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Bibliographic Info

Paper provided by University of California, Davis, Department of Economics in its series Working Papers with number 531.

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Length: 47
Date of creation: 23 Aug 2005
Date of revision:
Handle: RePEc:cda:wpaper:05-31

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Keywords: labor; welfare; reform;

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References

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  3. Bitler, Marianne P. & Gelbach, Jonah B. & Hoynes, Hilary W., 2005. "What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments," IZA Discussion Papers 1728, Institute for the Study of Labor (IZA).
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  21. Terra McKinnish & Seth Sanders & Jeffrey Smith, 1999. "Estimates of Effective Guarantees and Tax Rates in the AFDC Program for the Post-OBRA Period," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 312-345.
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  23. Jonathan Gruber, 1996. "Cash Welfare as a Consumption Smoothing Mechanism for Single Mothers," NBER Working Papers 5738, National Bureau of Economic Research, Inc.
  24. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
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