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Do Welfare Asset Limits Affect Household Saving? Evidence from Welfare Reform

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  • Erik Hurst
  • James P. Ziliak

Abstract

In this paper, we use household-level data from the Panel Study of Income Dynamics to examine the impact of new saving incentives that were implemented as part of the overhaul of U.S. welfare policy during the mid-1990s on the saving of households at risk of entering welfare. The Temporary Assistance to Needy Families program devolved responsibility of program rules to the states, and many states have responded by relaxing liquid asset and vehicle-equity limits that determine program eligibility, and by introducing time limits on benefit receipt. According to the recent theoretical work and statements made by public officials, such policies are predicted to increase total savings for those households who have a large ex-ante probability of welfare receipt such as female-headed households with children. We follow a sample of female heads with children from 1994 to 2001 and find that in both absolute terms, and relative to comparison groups of male heads and female heads without children, there has been no impact of welfare policy changes on the saving of at-risk households.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10487.

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Date of creation: May 2004
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Publication status: published as Hurst, Erik and James P. Ziliak. "Do Welfare Asset Limits Affect Household Saving?," Journal of Human Resources, 2006, v41(1,Winter), 46-71.
Handle: RePEc:nbr:nberwo:10487

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  8. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers, Institute for Fiscal Studies W98/18, Institute for Fiscal Studies.
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  14. Erik Hurst & James P. Ziliak, 2001. "Welfare Reform and Household Saving," JCPR Working Papers, Northwestern University/University of Chicago Joint Center for Poverty Research 234, Northwestern University/University of Chicago Joint Center for Poverty Research.
  15. Richard T. Curtin & Thomas Juster & James N. Morgan, 1989. "Survey Estimates of Wealth: An Assessment of Quality," NBER Chapters, in: The Measurement of Saving, Investment, and Wealth, pages 473-552 National Bureau of Economic Research, Inc.
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Cited by:
  1. Baum, Charles L., 2009. "The effects of vehicle ownership on employment," Journal of Urban Economics, Elsevier, vol. 66(3), pages 151-163, November.
  2. Dutko, Paula & Ver Ploeg, Michele & Farrigan, Tracey L., 2012. "Retail Wastelands: Characteristics and Influential Factors of Food Deserts," 2012 AAEA/EAAE Food Environment Symposium, May 30-31, Boston, MA, Agricultural and Applied Economics Association 123201, Agricultural and Applied Economics Association.
  3. Purvi Sevak & Lina Walker, 2007. "The Responsiveness of Private Savings to Medicaid Long Term Care Policies," Working Papers, University of Michigan, Michigan Retirement Research Center wp150, University of Michigan, Michigan Retirement Research Center.
  4. Hardy Hulley & Rebecca Mckibbin & Andreas Pedersen & Susan Thorp, 2013. "Means-Tested Public Pensions, Portfolio Choice and Decumulation in Retirement," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 89(284), pages 31-51, 03.
  5. Nathan Berg & Todd Gabel, 2013. "Effects of New Welfare Reform Strategies on Welfare Participation: Microdata Estimates from Canada," Working Papers, University of Otago, Department of Economics 1304, University of Otago, Department of Economics, revised Feb 2013.
  6. Grinstein-Weiss, Michal & Sherraden, Michael & Gale, William G. & Rohe, William & Schreiner, Mark & Key, Clinton, 2013. "Long-Term Impacts of Individual Development Accounts on Homeownership among Baseline Renters: Follow-Up Evidence from a Randomized Experiment," MPRA Paper 55058, University Library of Munich, Germany.
  7. Marc K Chan, 2014. "Welfare Dependence and Self-Control: An Empirical Analysis," Working Paper Series, Economics Discipline Group, UTS Business School, University of Technology, Sydney 19, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
  8. Charles L. Baum II, 2010. "The Effects of Food Stamps on Weight Gained by Expectant Mothers," Working Papers, Middle Tennessee State University, Department of Economics and Finance 201002, Middle Tennessee State University, Department of Economics and Finance.
  9. Grinstein-Weiss, Michal & Wagner, Kristen & Ssewamala, Fred M., 2006. "Saving and asset accumulation among low-income families with children in IDAs," Children and Youth Services Review, Elsevier, Elsevier, vol. 28(2), pages 193-211, February.
  10. Charles Baum, 2012. "The effects of food stamp receipt on weight gained by expectant mothers," Journal of Population Economics, Springer, Springer, vol. 25(4), pages 1307-1340, October.
  11. Arthur B. Kennickell, 2009. "Ponds and streams: wealth and income in the U.S., 1989 to 2007," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2009-13, Board of Governors of the Federal Reserve System (U.S.).
  12. JohnKarl Scholz & Ananth Seshadri, 2007. "Children and Household Wealth," Working Papers, University of Michigan, Michigan Retirement Research Center wp158, University of Michigan, Michigan Retirement Research Center.

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