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Employer Demand, AFDC Recipients, and Labor Market Policy

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  • H. J. Holzer

Abstract

This paper discusses the potential labor market prospects of AFDC recipients who will be required to work under the new welfare legislation. Various characteristics of available low-skill jobs are compared with those of long-term AFDC recipients, and more general evidence on the labor market experiences of welfare recipients is reviewed. From these data, the potential availability of employment and wage levels that recipients will face in the labor market is inferred. The data suggest that job availability for long-term recipients will be quite limited, especially in the short run; many will likely be plagued by lengthy durations of nonemployment, as well as high job turnover and low wages and benefits when they do work. The implications of these findings for labor market policy are then discussed.

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File URL: http://www.irp.wisc.edu/publications/dps/pdfs/dp111596.pdf
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Bibliographic Info

Paper provided by University of Wisconsin Institute for Research on Poverty in its series Institute for Research on Poverty Discussion Papers with number 1115-96.

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Handle: RePEc:wop:wispod:1115-96

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  1. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
  2. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1992. "On the Labor Market Effects of Immigration and Trade," NBER Chapters, in: Immigration and the Workforce: Economic Consequences for the United States and Source Areas, pages 213-244 National Bureau of Economic Research, Inc.
  3. Rachel M. Friedberg & J. Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Working Papers 95-5, Brown University, Department of Economics.
  4. D. R. Meyer & M. Cancian, . "Life after Welfare: The Economic Well-Being of Women and Children Following an Exit from AFDC," Institute for Research on Poverty Discussion Papers 1101-96, University of Wisconsin Institute for Research on Poverty.
  5. Daniel Immergluck, 1996. "What employers want: Job prospects for less-educated workers," The Review of Black Political Economy, Springer, vol. 24(4), pages 135-143, June.
  6. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-52, June.
  7. Hilary Williamson Hoynes, 2000. "Local Labor Markets And Welfare Spells: Do Demand Conditions Matter?," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 351-368, August.
  8. David Neumark & William Wascher, 1995. "Reconciling the evidence on employment effects of minimum wages: a review of our research findings," Finance and Economics Discussion Series 95-53, Board of Governors of the Federal Reserve System (U.S.).
  9. Lawrence F. Katz, 1996. "Wage Subsidies for the Disadvantaged," NBER Working Papers 5679, National Bureau of Economic Research, Inc.
  10. Kim B. Clark & Lawrence H. Summers, 1982. "The Dynamics of Youth Unemployment," NBER Chapters, in: The Youth Labor Market Problem: Its Nature, Causes, and Consequences, pages 199-234 National Bureau of Economic Research, Inc.
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  12. Juhn, Chinhui, 1992. "Decline of Male Labor Market Participation: The Role of Declining Market Opportunities," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 79-121, February.
  13. David Card & Alan B. Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," NBER Working Papers 4509, National Bureau of Economic Research, Inc.
  14. Ruhm, Christopher J, 1997. "Is High School Employment Consumption or Investment?," Journal of Labor Economics, University of Chicago Press, vol. 15(4), pages 735-76, October.
  15. Oettinger, Gerald S, 1996. "Statistical Discrimination and the Early Career Evolution of the Black-White Wage Gap," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 52-78, January.
  16. Stephen V. Cameron & James J. Heckman, 1991. "The Nonequivalence of High School Equivalents," NBER Working Papers 3804, National Bureau of Economic Research, Inc.
  17. Leslie E. Papke, 1993. "What Do We Know about Enterprise Zones?," NBER Working Papers 4251, National Bureau of Economic Research, Inc.
  18. Harry J. Holzer & Keith R. Ihlanfeldt, 1996. "Spatial factors and the employment of blacks at the firm level," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 65-86.
  19. Robert H. Meyer & David A. Wise, 1983. "High School Preparation and Early Labor Force Experience," NBER Working Papers 0342, National Bureau of Economic Research, Inc.
  20. Robert J. LaLonde, 1995. "The Promise of Public Sector-Sponsored Training Programs," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 149-168, Spring.
  21. Hilary Williamson Hoynes, 1996. "Work, Welfare, and Family Structure: What Have We Learned?," NBER Working Papers 5644, National Bureau of Economic Research, Inc.
  22. Lawrence F. Katz, 1994. "Active labor market policies to expand employment and opportunity," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, issue Jan, pages 239-322.
  23. 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.
  24. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle.
  25. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-81, September.
  26. Timothy J. Bartik, 2003. "Local Economic Development Policies," Upjohn Working Papers and Journal Articles 03-91, W.E. Upjohn Institute for Employment Research.
  27. Harry J. Holzer, 1994. "Black employment problems: New evidence, old questions," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(4), pages 699-722.
  28. George J. Borjas, 1986. "The Demographic Determinants of the Demand for Black Labor," NBER Chapters, in: The Black Youth Employment Crisis, pages 191-232 National Bureau of Economic Research, Inc.
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Cited by:
  1. Duffy, Patricia A., 1997. "Is The New Deal Dead? Government, Economics, And The Rural South," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 29(01), July.
  2. Timothy J. Bartik, 2002. "Instrumental Variable Estimates of the Labor Market Spillover Effects of Welfare Reform," Upjohn Working Papers and Journal Articles 02-78, W.E. Upjohn Institute for Employment Research.
  3. Shao-Hsun Keng & Steven B. Garasky & Helen H. Jensen, 1999. "Innovation at the State Level: Initial Effects of Welfare Reform in Iowa," Center for Agricultural and Rural Development (CARD) Publications 99-wp232, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  4. Julia Lane & David Stevens, 2000. "Welfare-to-Work Policy: Employer Hiring and Retention of Former Welfare Recipients," JCPR Working Papers 19, Northwestern University/University of Chicago Joint Center for Poverty Research.

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