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The Effects of Time Limits and Other Policy Changes on Welfare Use, Work, and Income Among Female-Headed Families

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Jeffrey Grogger

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Abstract

Of all of the welfare reforms that were implemented during the 1990's, time limits may represent the single greatest break from past policy. This paper expands on what is known about this important welfare reform measure by exploiting the predictions from Grogger and Michalopoulos (1999) to estimate the effects of time limits on welfare use, employment, labor supply, earnings, and income among female-headed families. Results based on data from the March Current Population Survey suggest that time limits have had important effects on welfare use and work, accounting for about one-eighth of the decline in welfare use and about 7 percent of the rise in employment since 1993. They have had no significant effect on earnings or income, however. The analysis also shows that the collective effects of other reforms have had important impacts on employment and labor supply. Furthermore, it identifies the Earned Income Tax Credit (EITC) as a particularly important contributor to both the recent decrease in welfare use and the recent increase in employment, labor supply, and earnings.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8153.

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Date of creation: Mar 2001
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Handle: RePEc:nbr:nberwo:8153

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I3 - Health, Education, and Welfare - - Welfare and Poverty

References listed on IDEAS
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  1. Robert A. Moffitt & LaDonna Pavetti, 1999. "Time Limits," JCPR Working Papers 91, Northwestern University/University of Chicago Joint Center for Poverty Research.
  2. J. P. Ziliak & D. N. Figlio & E. E. Davis & L. S. Connolly, . "Accounting for the Decline in AFDC Caseloads: Welfare Reform or Economic Growth?," Institute for Research on Poverty Discussion Papers 1151-97, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
  3. 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. [Downloadable!]
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  4. Robert F. Schoeni & Rebecca M. Blank, 2000. "What Has Welfare Reform Accomplished? Impacts on Welfare Participation, Employment, Income, Poverty, and Family Structure," Working Papers 00-02, RAND Corporation Publications Department. [Downloadable!]
    Other versions:
  5. Stacy Dickert & Scott Houser & John Karl Scholz, 1995. "The Earned Income Tax Credit and Transfer Programs: A Study of Labor Market and Program Participation," NBER Chapters, in: Tax Policy and the Economy, Volume 9, pages 1-50 National Bureau of Economic Research, Inc. [Downloadable!]
  6. Jeff Grogger, 2000. "Time Limits and Welfare Use," NBER Working Papers 7709, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Rebecca M. Blank, 1999. "What Goes Up Must Come Down? Explaining Recent Changes in Public Assistance Caseloads," JCPR Working Papers 78, Northwestern University/University of Chicago Joint Center for Poverty Research.
  8. V. Joseph Hotz & John Karl Scholz, 2001. "The Earned Income Tax Credit," NBER Working Papers 8078, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Robert A. Moffitt, 1999. "The Effect of Pre-PRWORA Waivers on AFDC Caseloads and Female Earnings, Income, and Labor Force Behavior," JCPR Working Papers 89, Northwestern University/University of Chicago Joint Center for Poverty Research.
  10. Jeff Grogger & Charles Michalopoulos, 1999. "Welfare Dynamics Under Time Limits," NBER Working Papers 7353, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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(explanations, 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.)

  1. Bruce D. Meyer, 2002. "Labor Supply at the Extensive and Intensive Margins: The EITC, Welfare, and Hours Worked," American Economic Review, American Economic Association, vol. 92(2), pages 373-379, May. [Downloadable!]
  2. Fitzgerald, John M. & Ribar, David C., 2003. "Transitions in Welfare Participation and Female Headship," IZA Discussion Papers 895, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Jonathan F. Pingle, 2003. "What if welfare had no work requirements? the age of youngest child exemption and the rise in employment of single mothers," Finance and Economics Discussion Series 2003-57, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  4. Thomas DeLeire & Helen Levy, 2004. "The Material Well-Being of Single Mother Households in the 1980s and 1990s: What Can We Learn From Food Spending?," Working Papers 0501, Harris School of Public Policy Studies, University of Chicago. [Downloadable!]
  5. Richard W. Johnson & Melissa M. Favreault & Joshua H. Goldwyn, 2003. "Employment, Social Security, And Future Retirement Outcomes For Single Mothers `," Working Papers, Center for Retirement Research at Boston College 2003-14, Center for Retirement Research. [Downloadable!]
  6. Adam Looney, 2005. "The effects of welfare reform and related policies on single mothers' welfare use and employment," Finance and Economics Discussion Series 2005-45, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  7. John M. Fitzgerald & David Ribar, 2001. "The Impact of Welfare Waivers on Female Headship Decisions," JCPR Working Papers 247, Northwestern University/University of Chicago Joint Center for Poverty Research.
    Other versions:
  8. 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, vol. 92(2), pages 380-384, May. [Downloadable!]
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