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Are lone mothers responsive to policy changes? The effects of a Norwegian workfare reform on earnings, education and poverty

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  • Pronzato, Chiara
  • Mogstad, Magne

Abstract

High welfare dependency and poverty rate among lone mothers prompted a workfare reform of the Norwegian welfare system for lone parents: activity requirements were brought in, time limits imposed and benefit levels raised. To evaluate the reform we introduce an estimator that, unlike the much used difference-in-difference approach, accounts for the fact that policy changes are typically phased in gradually rather than coming into full effect immediately. We find that the reform has not only led to increased earnings and educational attainment – in the process lowering welfare caseloads and therefore easing the government’s financial burden – but also reduced poverty.

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Paper provided by Institute for Social and Economic Research in its series ISER Working Paper Series with number 2008-15.

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Date of creation: 09 Apr 2008
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Publication status: published
Handle: RePEc:ese:iserwp:2008-15

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  1. Bruce D. Meyer & Dan T. Rosenbaum, 1999. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," NBER Working Papers 7363, National Bureau of Economic Research, Inc.
  2. Robert Moffitt, 2002. "The Temporary Assistance for Needy Families Program," NBER Working Papers 8749, National Bureau of Economic Research, Inc.
  3. Christopher A. Swann, 2004. "Welfare Reform when Recipients are Forward-Looking," Department of Economics Working Papers, Stony Brook University, Department of Economics 04-04, Stony Brook University, Department of Economics.
  4. V. Joseph Hotz & Charles H. Mullin & John Karl Scholz, 2002. "Welfare, Employment, and Income: Evidence on the Effects of Benefit Reductions from California," American Economic Review, American Economic Association, American Economic Association, vol. 92(2), pages 380-384, May.
  5. Randi Kjeldstad & Marit R�nsen, 2004. "Welfare Rules, Business Cycles, And Employment Dynamics Among Lone Parents In Norway," Feminist Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 10(2), pages 61-89.
  6. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
  7. John F. Ermisch & Robert E. Wright, 1991. "Welfare Benefits and Lone Parents' Employment in Great Britain," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 424-456.
  8. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, Elsevier, vol. 28(1), pages 85-101, April.
  9. repec:ese:iserwp:2006-07 is not listed on IDEAS
  10. Richard Burkhauser & Greg Duncan & Richard Hauser & Roland Berntsen, 1991. "Wife or frau, women do worse: A comparison of men and women in the United States and Germany after marital dissolution," Demography, Springer, Springer, vol. 28(3), pages 353-360, August.
  11. Arnstein Aassve & Gianni Betti & Stefano Mazzuco & Letizia Mencarini, 2007. "Marital disruption and economic well-being: a comparative analysis," Journal of the Royal Statistical Society Series A, Royal Statistical Society, Royal Statistical Society, vol. 170(3), pages 781-799.
  12. Nada Eissa & Jeffrey B. Liebman, 1995. "Labor Supply Response to the Earned Income Tax Credit," NBER Working Papers 5158, National Bureau of Economic Research, Inc.
  13. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, American Economic Association, vol. 76(4), pages 604-20, September.
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Cited by:
  1. Pronzato, Chiara Daniela, 2014. "Fighting Lone Mothers’ Poverty through In-Work Benefits Methodological Issues and Policy Suggestions," Department of Economics and Statistics Cognetti de Martiis. Working Papers, University of Turin 201420, University of Turin.
  2. Drange, Nina & Rege, Mari, 2013. "Trapped at home: The effect of mothers' temporary labor market exits on their subsequent work career," Labour Economics, Elsevier, Elsevier, vol. 24(C), pages 125-136.
  3. Nina Drange & Mari Rege, 2012. "Trapped at Home: The Effect of Mothers' Temporary Labor Market Exits on their Subsequent Work Career," CESifo Working Paper Series 3833, CESifo Group Munich.
  4. Pronzato, Chiara D., 2012. "Comparing Quasi-Experimental Designs and Structural Models for Policy Evaluation: The Case of a Reform of Lone Parental Welfare," IZA Discussion Papers 6803, Institute for the Study of Labor (IZA).

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