In this paper, we develop a dynamic structural model of single mothers' work and welfare participation decisions while their children are young. This model is used to measure the e ffects of mothers' decisions on short run attainments of the children of NLSY 79. Using PIAT Math test score as a measure of attainment, we fi nd that both single mothers' work and welfare use in the fi rst fi ve years of their children's lives have a positive e ffect on children's outcomes, but this e ffect declines with initial ability. The higher the initial ability of a child, the lower the positive impact work and welfare have. In fact, in the case of welfare the eff ect is negative if a child has more than median initial ability. Furthermore, we fi nd that the work requirement reduces a single mother's use of welfare. However, the net eff ect of the work requirement on a child's test score depends on whether the mother's work brings in enough labor income to compensate for the loss of welfare bene fits. We also look at the implications of the welfare eligibility time limit and maternal leave policies on children's outcomes.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
10228.
Find related papers by JEL classification: J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply I38 - Health, Education, and Welfare - - Welfare and Poverty - - - Government Programs; Provision and Effects of Welfare Programs J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
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