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Displacement and Wage Effects of Welfare Reform

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  • Timothy J. Bartik

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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Bibliographic 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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Postal: Harris Graduate School of Public Policy Studies, 1155 E. 60th Street Chicago, IL 60637
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Web page: http://www.jcpr.org/wp/ByDate.html
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Cited by:
  1. 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.
  2. Darren H. Lubotsky, 1999. "The Labor Market Effects of Welfare Reform," Labor and Demography 9904001, EconWPA.
  3. 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, Victoria University, Centre of Policy Studies/IMPACT Centre.

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