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Intergenerational transmission of welfare dependency: The effects of length of exposure

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  • Oscar A. Mitnik

    ()
    (Department of Economics, University of Miami)

Abstract

It is well documented that a positive correlation exists between receiving welfare as a child and depending on welfare as an adult. However, previous studies have not been able to explore many aspects of this relationship. This paper uses a unique administrative dataset for California, which follows welfare recipients since their teenage years until early adulthood, to study the causal effects of different lengths of welfare exposure as a child (conditional on welfare receipt) on future welfare dependency as a young adult. The econometric analyses in this paper use a recently developed method from the program evaluation literature, based on the estimation of a generalized propensity score (GPS). As in the binary-treatment case the GPS permits removing the biases associated with differences in the observed characteristics of individuals. In addition, for some analyses, family-level unobserved heterogeneity is controlled for by relying on pairs of siblings exposed to different lengths of exposure. The results show that there is no causal effect of length of exposure on future welfare dependency, nor on teenage childbearing. Conditional on teenage childbearing, there are no effects of length of exposure on adult welfare dependency either, but this dependency is almost three times larger for teenage mothers than for non-mothers. All results hold when controlling for unobserved heterogeneity. The results indicate that policies like time-limits are not likely to reduce the intergenerational correlation of welfare dependency.

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File URL: http://moya.bus.miami.edu/~omitnik/PDF_Documents/Intergenerational_Welfare.pdf
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Bibliographic Info

Paper provided by University of Miami, Department of Economics in its series Working Papers with number 0715.

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Length: 47 pages
Date of creation: 14 Jun 2007
Date of revision:
Publication status: Forthcoming: Under Review
Handle: RePEc:mia:wpaper:0715

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Related research

Keywords: Welfare Dependency; Continuous Treatments;

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References

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  1. H. W. Hoynes, . "Local Labor Markets and Welfare Spells: Do Demand Conditions Matter?," Institute for Research on Poverty Discussion Papers 1104-96, University of Wisconsin Institute for Research on Poverty.
  2. Jacob Alex Klerman & Steven J. Haider, 2004. "A Stock-Flow Analysis of the Welfare Caseload," Journal of Human Resources, University of Wisconsin Press, vol. 39(4).
  3. Peter Gottschalk, 1993. "Is The Correlation In Welfare Participation Across Generations Spurious?," Boston College Working Papers in Economics 224, Boston College Department of Economics.
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  6. H. W. Hoynes, . "Does welfare play any role in female headship decisions?," Institute for Research on Poverty Discussion Papers 1078-95, University of Wisconsin Institute for Research on Poverty.
  7. Lechner, Michael, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA).
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  16. Kosuke Imai & David A. van Dyk, 2004. "Causal Inference With General Treatment Regimes: Generalizing the Propensity Score," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 854-866, January.
  17. Carlos A. Flores & Alfonso Flores-Lagunes, 2007. "Identification and Estimation of Casual Mechanisms and Net Effects of a Treatment," Working Papers 0706, University of Miami, Department of Economics.
  18. Phillip B. Levine & David J. Zimmerman, 2000. "Children's Welfare Exposure and Subsequent Development," NBER Working Papers 7522, National Bureau of Economic Research, Inc.
  19. An, Chong-Bum & Haveman, Robert & Wolfe, Barbara, 1993. "Teen Out-of-Wedlock Births and Welfare Receipt: The Role of Childhood Events and Economic Circumstances," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 195-208, May.
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  22. John V. Pepper, 2000. "The Intergenerational Transmission Of Welfare Receipt: A Nonparametric Bounds Analysis," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 472-488, August.
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Citations

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Cited by:
  1. Choe, Chung & Flores-Lagunes, Alfonso & Lee, Sang-Jun, 2011. "Do Dropouts Benefit from Training Programs? Korean Evidence Employing Methods for Continuous Treatments," IZA Discussion Papers 6064, Institute for the Study of Labor (IZA).
  2. Carlos A. Flores & Oscar A. Mitnik, 2009. "Evaluating Nonexperimental Estimators for Multiple Treatments: Evidence from Experimental Data," Working Papers 2010-9, University of Miami, Department of Economics.
  3. Black, Sandra & Devereux, Paul J., 2010. "Recent Developments in Intergenerational Mobility," CEPR Discussion Papers 7786, C.E.P.R. Discussion Papers.
  4. Bratberg, Espen & Nilsen, Øivind Anti & Vaage, Kjell, 2012. "Is Recipiency of Disability Pension Hereditary?," Discussion Paper Series in Economics 10/2012, Department of Economics, Norwegian School of Economics.
  5. Michela Bia & Alessandra Mattei, 2012. "Assessing the effect of the amount of financial aids to Piedmont firms using the generalized propensity score," Statistical Methods and Applications, Springer, vol. 21(4), pages 485-516, November.

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