The Effects of Single Mothers' Welfare Participation and Work Decisions on Children's Attainments
AbstractThis research examines the effects of mothers' welfare and work decisions on their children's attainments using a random effect instrumental variables (REIV) estimator. The estimator employs sibling comparisons in a random effect framework and an instrumental variables approach to address the unobserved heterogeneity that may influence mothers' work and welfare decisions. The identification comes from the variation in mothers' different economic incentives that arises from the AFDC benefit structures across U.S. states. We focus on children who were born to single mothers with twelve or fewer years of schooling. The short-run child attainments under consideration are the Peabody Individual Achievement Test math and reading recognition scores from the Children of the National Longitudinal Survey of Youth 1979 cohort. Long-run attainments are a child's number of years of schooling by age 25 and his or her early adulthood labor income, drawn from the Panel Study of Income Dynamics. The REIV estimates imply that, relative to no welfare participation, participating in welfare for one to three years provides up to a 5 percentage point gain in a child's Picture Individual Achievement Test (PIAT) scores. The negative effect of childhood welfare participation on adult earnings found by others is not significant if one accounts for mothers' work decisions. At the estimated values of the model parameters, a mother's number of years of work contributes between $3,000 and $7,000 1996 dollars to her child's labor income, but has no significant effect on the child's PIAT test scores. Finally, children's number of years of schooling are relatively unresponsive to mothers' work and welfare participation choices.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 10110.
Date of creation: 2006
Date of revision: 2008
Welfare reform; childhood cognitive ability; female work; random effects instrumental variables;
Other versions of this item:
- Hau Chyi & Orgul Ozturk, 2008. "The Effects of Single Mothers' Welfare Participation and Work Decisions on Children's Attainments," Summer North American Stata Users' Group Meetings 2008 9, Stata Users Group, revised 28 Aug 2008.
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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