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.
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Date of creation: Aug 2001
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Find related papers by JEL classification:
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- I38 - Health, Education, and Welfare - - Welfare, Well-Being, 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)
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