The Limits to Wage Growth: Measuring the Growth Rate of Wages For Recent Welfare Leavers
AbstractWe study the rate of wage growth among welfare leavers in the Self Sufficiency Program (SSP), an experimental earnings subsidy offered to long-term welfare recipients in Canada. Single parents who started working in response to the SSP incentive are younger, less educated, and have more young children than those who would have been working regardless of the program. They also earn relatively low wages in their first few months of work: typically within $1 of the minimum wage. Despite these differences, their rate of wage growth is similar to other welfare leavers. We estimate that people who were induced to work by SSP experienced real wage growth of about 2.5 - 3 percent per year - a rate consistent with conventional measures of the return to experience for similar workers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8444.
Date of creation: Aug 2001
Date of revision:
Note: LS PE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-08-30 (All new papers)
- NEP-LAB-2001-08-30 (Labour Economics)
- NEP-LTV-2001-08-30 (Unemployment, Inequality & Poverty)
- NEP-PKE-2001-08-30 (Post Keynesian 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.:
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
- Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
- James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998.
"Characterizing Selection Bias Using Experimental Data,"
NBER Working Papers
6699, National Bureau of Economic Research, Inc.
- James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
- Ahn, Hyungtaik & Powell, James L., 1993. "Semiparametric estimation of censored selection models with a nonparametric selection mechanism," Journal of Econometrics, Elsevier, vol. 58(1-2), pages 3-29, July.
- Timothy J. Bartik, 1997. "Short-Term Employment Persistence for Welfare Recipients: The "Effects" of Wages, Industry, Occupation and Firm," Upjohn Working Papers and Journal Articles 97-46, W.E. Upjohn Institute for Employment Research.
- Jeffrey Grogger & Lynn A. Karoly, 2005. "Welfare Reform, Work and Wages: A Summary of the US Experience," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 3(2), pages 08-12, 07.
- Reamonn Lydon & Ian Walker, 2005.
"Welfare to work, wages and wage growth,"
Institute for Fiscal Studies, vol. 26(3), pages 335-370, September.
- Hoynes, Hilary & Bitler, Marianne P. & Gelbach, Jonah B., 2005.
"Distributional Impacts of the Self-Sufficiency Project,"
05-30, University of California at Davis, Department of Economics.
- Bitler, Marianne P. & Gelbach, Jonah B. & Hoynes, Hilary W., 2008. "Distributional impacts of the Self-Sufficiency Project," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 748-765, April.
- Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2005. "Distributional Impacts of the Self-Sufficiency Project," NBER Working Papers 11626, National Bureau of Economic Research, Inc.
- Hilary W. Hoynes & Marianne P Bitler & Jonah B. Gelbach, 2005. "Distributional Impacts of the Self-Sufficiency Project," Working Papers 530, University of California, Davis, Department of Economics.
- Zabel, Jeffrey & Schwartz, Saul & Donald, Stephen, 2006. "An Econometric Analysis of the Impact of the Self-Sufficiency Project on the Employment Behaviour of Former Welfare Recipients," IZA Discussion Papers 2122, Institute for the Study of Labor (IZA).
- Herwig Immervoll, 2010.
"Minimum Income Benefits in OECD Countries: Policy Design, Effectiveness and Challenges,"
OECD Social, Employment and Migration Working Papers
100, OECD Publishing.
- Immervoll, Herwig, 2009. "Minimum-Income Benefits in OECD Countries: Policy Design, Effectiveness and Challenges," IZA Discussion Papers 4627, Institute for the Study of Labor (IZA).
- Jeffrey Grogger, 2005.
"Welfare Reform, Returns to Experience, and Wages: Using Reservation Wages to Account for Sample Selection Bias,"
NBER Working Papers
11621, National Bureau of Economic Research, Inc.
- Jeffrey Grogger, 2009. "Welfare Reform, Returns to Experience, and Wages: Using Reservation Wages to Account for Sample Selection Bias," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 490-502, August.
- Helen Connolly & Peter Gottschalk, 2001. "Do Earnings Subsidies Affect Job Choice? The Impact of SSP Subsidies on Wage Growth," Boston College Working Papers in Economics 498, Boston College Department of Economics, revised 26 Aug 2006.
- 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.
- Rebecca M. Blank, 2002.
"Evaluating Welfare Reform in the United States,"
NBER Working Papers
8983, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.