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Time-inconsistency and Welfare Program Participation: Evidence from the NLSY

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Author Info
Hanming Fang (Department of Economics, Yale University)
Dan Silverman (University of Michigan)

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Abstract

We empirically implement a dynamic structural model of labor supply and welfare program participation for agents with potentially time-inconsistent preferences. Using panel data on the choices of single women with children from the NLSY 1979, we provide estimates of the degree of time-inconsistency, and of its influence on the welfare take-up decision. With these estimates, we conduct counterfactual experiments to quantify the utility loss stemming from the inability to commit to future decisions, and the potential utility gains from commitment mechanisms such as welfare time limits and work requirements.

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File URL: http://cowles.econ.yale.edu/P/cd/d14b/d1465.pdf
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Publisher Info
Paper provided by Cowles Foundation, Yale University in its series Cowles Foundation Discussion Papers with number 1465.

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Length: 49 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:cwl:cwldpp:1465

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Related research
Keywords: Time inconsistent preferences; Welfare reform; Labor supply;

Other versions of this item:

Find related papers by JEL classification:
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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.:
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    Other versions:
  3. Adriana D. Kugler & Robert M. Sauer, 2005. "Doctors without Borders? Relicensing Requirements and Negative Selection in the Market for Physicians," Journal of Labor Economics, University of Chicago Press, vol. 23(3), pages 437-466, July. [Downloadable!]
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    Other versions:
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    Other versions:
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    Other versions:
  19. Keane, Michael P & Wolpin, Kenneth I, 2001. "The Effect of Parental Transfers and Borrowing Constraints on Educational Attainment," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 1051-1103, November.
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    Other versions:
  23. van der Klaauw, Wilbert, 1996. "Female Labour Supply and Marital Status Decisions: A Life-Cycle Model," Review of Economic Studies, Blackwell Publishing, vol. 63(2), pages 199-235, April. [Downloadable!] (restricted)
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    Other versions:
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    Other versions:
Full references

Cited by:
(explanations, 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. Michael P. Keane & Kenneth I. Wolpin, 2006. "The Role of Labor and Marriage Markets, Preference Heterogeneity and the Welfare System in the Life Cycle Decisions of Black, Hispanic and White Women," PIER Working Paper Archive 06-004, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania. [Downloadable!]
  2. Stephan Meier & Charles Sprenger, 2007. "Selection into financial literacy programs: evidence from a field study," Public Policy Discussion Paper 07-5, Federal Reserve Bank of Boston. [Downloadable!]
  3. John Ameriks & Andrew Caplin & John Leahy & Tom Tyler, 2004. "Measuring Self-Control," NBER Working Papers 10514, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Meier, Stephan & Sprenger, Charles, 2008. "Discounting Financial Literacy: Time Preferences and Participation in Financial Education Programs," IZA Discussion Papers 3507, Institute for the Study of Labor (IZA). [Downloadable!]
  5. David Laibson & Andrea Repetto & Jeremy Tobacman, 2007. "Estimating Discount Functions with Consumption Choices over the Lifecycle," NBER Working Papers 13314, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Malmendier, Ulrike M. & Della Vigna, Stefano, 2003. "Overestimating Self-Control: Evidence from the Health Club Industry," Research Papers 1800, Stanford University, Graduate School of Business. [Downloadable!]
  7. Francesco Drago, 2006. "Career Consequences of Hyperbolic Time Preferences," IZA Discussion Papers 2113, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Michael P. Keane & Kenneth I. Wolpin, 2009. "Empirical Applications of Discrete Choice Dynamic Programming Models," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(1), pages 1-22, January. [Downloadable!] (restricted)
  9. Peter Arcidiacono, Holger Sieg, Frank Sloan, 2001. "Living Rationally Under the Volcano? Heavy Drinking and Smoking Among the Elderly," Computing in Economics and Finance 2001 207, Society for Computational Economics. [Downloadable!]
  10. Christopher Ferrall, 2008. "Explaining and Forecasting Results of The Self-Sufficiency Project," Working Papers 1165, Queen's University, Department of Economics. [Downloadable!]
  11. Malmendier, Ulrike M. & Della Vigna, Stefano, 2003. "Contract Design and Self Control: Theory and Evidence," Research Papers 1801, Stanford University, Graduate School of Business. [Downloadable!]
  12. Kevin X.D. Huang & Zheng Liu & John Q. Zhu, 2007. "Temptation and Self-Control: Some Evidence and Applications," Working Papers 0711, Department of Economics, Vanderbilt University. [Downloadable!]
    Other versions:
  13. Stefano DellaVigna & Ulrike Malmendier, 2004. "Overestimating Self_Control: Evidence from the Health Club Industry," NBER Working Papers 10819, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Kevin X.D. Huang & Zheng Liu & Qi Zhu, 2005. "Temptation and Self-Control: Some Evidence from the Consumer Expenditure Survey," Emory Economics 0507, Department of Economics, Emory University (Atlanta). [Downloadable!]
    Other versions:
  15. Ted O’Donoghue & Matthew Rabin, 2006. "Incentives and Self Control," Levine's Bibliography 122247000000001262, UCLA Department of Economics. [Downloadable!]
  16. Judith Chevalier & Austan Goolsbee, 2005. "Are Durable Goods Consumers Forward Looking? Evidence from College Textbooks," NBER Working Papers 11421, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Paserman, M. Daniele, 2004. "Job Search and Hyperbolic Discounting: Structural Estimation and Policy Evaluation," IZA Discussion Papers 997, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  18. Stephan Meier & Charles Sprenger, 2007. "Impatience and credit behavior: evidence from a field experiment," Working Papers 07-3, Federal Reserve Bank of Boston. [Downloadable!]
  19. Malmendier, Ulrike M. & Della Vigna, Stefano, 2002. "Overestimating Self-Control: Evidence from the Health Club Industry," Research Papers 1880, Stanford University, Graduate School of Business. [Downloadable!]
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