The Pitfalls of Work Requirements in Welfare-to-Work Policies: Experimental Evidence on Human Capital Accumulation in the Self-Sufficiency Project
AbstractThis paper investigates whether policies that encourage recipients to exit welfare for full-time employment influence participation in educational activity. The Self-Sufficiency Project ('SSP') was a demonstration project where long-term welfare recipients randomly assigned to the treatment group were offered a generous earnings supplement if they exited welfare for full-time employment. We find that treatment group members were less likely to upgrade their education along all dimensions: high-school completion, enrolling in a community college or trade school, and enrolling in university. Thus, 'work-first'; policies that encourage full-time employment may reduce educational activity and may have adverse consequences on the long-run earnings capacity of welfare recipients. We also find that there was a substantial amount of educational upgrading in this population. For instance, among high-school dropouts at the baseline, 19% completed their diploma by the end of the demonstration. Finally, we simulate the consequences of the earnings supplement in the absence of adverse effects on educational upgrading. Doing so alters the interpretation of the lessons from the SSP demonstration.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6378.
Length: 43 pages
Date of creation: Feb 2012
Date of revision:
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Other versions of this item:
- Riddell, Chris & Riddell, Craig, 2012. "The pitfalls of work requirements in welfare-to-work policies: Experimental evidence on human capital accumulation in the Self-Sufficiency Project," CLSRN Working Papers clsrn_admin-2012-11, UBC Department of Economics, revised 31 Mar 2012.
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
- J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-08 (All new papers)
- NEP-EDU-2012-03-08 (Education)
- NEP-HRM-2012-03-08 (Human Capital & Human Resource Management)
- NEP-LAB-2012-03-08 (Labour Economics)
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.:
- Rebecca M. Blank, David Card and Philip K. Robins, 1999.
"Financial Incentives for Increasing Work and Income Among Low-Income Families,"
Economics Working Papers
E99-264, University of California at Berkeley.
- Rebecca M. Blank & David Card & Philip K. Robins, 1999. "Financial Incentives for Increasing Work and Income Among Low- Income Families," HEW 9902002, EconWPA.
- Rebecca M. Blank & David Card & Philip K. Robins, 1999. "Financial Incentives for Increasing Work and Income Among Low-Income Families," NBER Working Papers 6998, National Bureau of Economic Research, Inc.
- Blank, Rebecca M. & Card, David & Robins, Philip K., 1999. "Financial Incentives for Increasing Work and Income Among Low-Income Families," Department of Economics, Working Paper Series qt2f15x7sg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Rebecca M. Blank & David Card & Philip K. Robins, 1999. "Financial Incentives for Increasing Work and Income Among Low-Income Families," JCPR Working Papers 69, Northwestern University/University of Chicago Joint Center for Poverty Research.
- David Card & Dean R. Hyslop, 2004.
"Estimating the Effects of a Time Limited Earnings Subsidy for Welfare Leavers,"
NBER Working Papers
10647, National Bureau of Economic Research, Inc.
- David Card & Dean R. Hyslop, 2005. "Estimating the Effects of a Time-Limited Earnings Subsidy for Welfare-Leavers," Econometrica, Econometric Society, vol. 73(6), pages 1723-1770, November.
- Philip K. Robins & Charles Michalopoulos, 2001. "Using financial incentives to encourage welfare recipients to become economically self-sufficient," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 105-123.
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