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What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments

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  • Marianne P. Bitler
  • Jonah B. Gelbach
  • Hilary W. Hoynes

Abstract

Labor supply theory predicts systematic heterogeneity in the impact of recent welfare reforms on earnings, transfers, and income. Yet most welfare reform research focuses on mean impacts. We investigate the importance of heterogeneity using randomassignment data from Connecticut?s Jobs First waiver, which features key elements of post-1996 welfare programs. Estimated quantile treatment effects exhibit the substantial heterogeneity predicted by labor supply theory. Thus mean impacts miss a great deal. Looking separately at samples of dropouts and other women does not improve the performance of mean impacts. We conclude that welfare reform?s effects are likely both more varied and more extensive than has been recognized. (JEL D31, I38, J31)

Suggested Citation

  • Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2006. "What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments," American Economic Review, American Economic Association, vol. 96(4), pages 988-1012, September.
  • Handle: RePEc:aea:aecrev:v:96:y:2006:i:4:p:988-1012
    Note: DOI: 10.1257/aer.96.4.988
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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