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The Impact of Earnings Disregards on the Behavior of Low Income Families

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  • Jordan D. Matsudaira
  • Rebecca M. Blank

Abstract

This paper investigates the impact of changes in earnings disregards for welfare assistance received by single mothers following welfare reform in 1996. Some states adopted much higher earnings disregards (women could work full time and still receive welfare), while other states did not. We explore the effect of these changes on women's labor supply and income using several data sources and multiple estimation strategies. Our results indicate these changes had little effect on labor supply or income. We show this is because few women used these earnings disregards. This is surprising and we discuss why this might occur.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14038.

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Date of creation: May 2008
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Publication status: published as The Impact of Earnings Disregards on the Behavior of Low-Income Families Jordan D. Matsudaira, Rebecca M. Blank Article first published online: 10 OCT 2013 DOI: 10.1002/pam.21725 © 2013 by the Association for Public Policy Analysis and Management Issue Journal of Policy Analysis and Management Journal of Policy Analysis and Management Volume 33, Issue 1, pages 7–35, Winter 2014
Handle: RePEc:nbr:nberwo:14038

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  1. Rebecca M. Blank, 2002. "Can Equity and Efficiency Complement Each Other?," NBER Working Papers 8820, National Bureau of Economic Research, Inc.
  2. Alan J. Auerbach & Joel Slemrod, 1997. "The Economic Effects of the Tax Reform Act of 1986," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 35(2), pages 589-632, June.
  3. 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.
  4. Bruce D. Meyer, 2002. "Labor Supply at the Extensive and Intensive Margins: The EITC, Welfare, and Hours Worked," American Economic Review, American Economic Association, American Economic Association, vol. 92(2), pages 373-379, May.
  5. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," NBER Working Papers 8983, National Bureau of Economic Research, Inc.
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Cited by:
  1. Lucie Schmidt, 2013. "The New Safety Net? Supplemental Security Income after Welfare Reform," Department of Economics Working Papers, Department of Economics, Williams College 2013-07, Department of Economics, Williams College.

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