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Displacement and Wage Effects of Welfare Reform

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Author Info
Timothy J. Bartik

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Abstract

In this paper, I consider the displacement and wage effects of welfare reform. Recent welfare reforms are pushing welfare recipients into the labor market. Will jobs obtained by ex-welfare recipients come at the expense of others, who will be "displaced" by losing jobs or having fewer job vacancies available? Will the increased labor supply of welfare recipients stimulate job creation? Will the increased labor supply of welfare recipients depress wages overall, or for women with little education? To address these questions, in this paper I will: provide estimates of how welfare reform will affect labor supply; discuss the forces influencing displacement and wage effects of welfare reform; review previous estimates of wage effects that will occur because of welfare reform; provide new simulations, using several methodologies and estimates, of the displacement and wage effects that will occur because of welfare reform. explore what we can see so far about the labor market effects of welfare reform.

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Publisher Info
Paper provided by Northwestern University/University of Chicago Joint Center for Poverty Research in its series JCPR Working Papers with number 66.

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Date of creation: 01 Jan 1999
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Handle: RePEc:wop:jopovw:66

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References listed on IDEAS
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. H. J. Holzer, . "Employer Demand, AFDC Recipients, and Labor Market Policy," Institute for Research on Poverty Discussion Papers 1115-96, University of Wisconsin Institute for Research on Poverty. [Downloadable!]
  2. Greenwood, Michael J & Hunt, Gary L, 1984. "Migration and Interregional Employment Redistribution in the United States," American Economic Review, American Economic Association, vol. 74(5), pages 957-69, December. [Downloadable!] (restricted)
  3. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  4. Rebecca M. Blank, 1997. "What Causes Public Assistance Caseloads to Grow?," NBER Working Papers 6343, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September. [Downloadable!] (restricted)
  6. repec:fth:prinin:343 is not listed on IDEAS
  7. Timothy Bartik, 1993. "Who Benefits from Local Job Growth: Migrants or the Original Residents?," Regional Studies, Taylor and Francis Journals, vol. 27(4), pages 297-311, January. [Downloadable!] (restricted)
  8. Bartik, Timothy J., 1996. "The Distributional Effects of Local Labor Demand and Industrial Mix: Estimates Using Individual Panel Data," Journal of Urban Economics, Elsevier, vol. 40(2), pages 150-178, September. [Downloadable!] (restricted)
  9. Timothy J. Bartik, 1998. "The Labor Supply Effects of Welfare Reform," Staff Working Papers 98-53, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  10. Blanchflower, David G & Oswald, Andrew J, 1990. " The Wage Curve," Scandinavian Journal of Economics, Blackwell Publishing, vol. 92(2), pages 215-35.
    Other versions:
    • Blanchflower, D. & Oswald, A., 1989. "The Wage Curve," Papers 340, London School of Economics - Centre for Labour Economics.
    • David G. Blanchflower & Andrew J. Oswald, 1990. "The Wage Curve," NBER Working Papers 3181, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    • David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, December.
  11. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Mary Daly, 1997. "Labor market effects of welfare reform," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue Aug 29. [Downloadable!]
  13. Treyz, George I, et al, 1993. "The Dynamics of U.S. Internal Migration," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 209-14, May. [Downloadable!] (restricted)
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Cited by:
(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. Darren H. Lubotsky, 1999. "The Labor Market Effects of Welfare Reform," Labor and Demography 9904001, EconWPA. [Downloadable!]
    Other versions:
  2. Laura Leete & Neil Bania, 2004. "The Interaction between Food Stamps and Welfare Programs: An Empirical Model of Program Dynamics in the Cleveland Metropolitan Area, 1992-2003," Working Papers 0403, Harris School of Public Policy Studies, University of Chicago. [Downloadable!]
  3. Rebecca M. Blank, 2001. "Declining caseloads/increased work: what can we conclude about the effects of welfare reform?," Economic Policy Review, Federal Reserve Bank of New York, issue Sep, pages 25-36. [Downloadable!]
  4. Peter B. Dixon & Maureen T. Rimmer, 2005. "The Displacement Effect of Labour-Market Programs: Estimates from the MONASH Model," Centre of Policy Studies/IMPACT Centre Working Papers g-154, Monash University, Centre of Policy Studies/IMPACT Centre. [Downloadable!]
  5. Lawrence Katz & Alan Krueger, 1999. "The High-pressure U.S. Labor Market of the 1990s," Working Papers 795, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
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