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Dynamic properties of the welfare caseload

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Listed author(s):
  • Haider, Steven J.
  • Klerman, Jacob Alex

Abstract

The welfare caseload evolves through a process of flows onto and off of welfare that can be described with a Markov Chain model. Using formal results for Markov models, this paper examines the dynamic properties of the welfare caseload. In particular, the authors examine steady states, the speed of convergence, and the relative importance of entry and exit for changes in the caseload. Implementing these models with administrative data for California, the authors find that the welfare caseload has considerable momentum and that adjustments are far from instantaneous. In addition, the authors find that changes in the entry rate are empirically more important than changes in the exit rate for explaining changes in the overall caseload. These findings have considerable implications for the conventional methods that are used to study the changing caseload.

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File URL: http://www.sciencedirect.com/science/article/pii/S0927-5371(04)00051-X
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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 12 (2005)
Issue (Month): 5 (October)
Pages: 629-648

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Handle: RePEc:eee:labeco:v:12:y:2005:i:5:p:629-648
Contact details of provider: Web page: http://www.elsevier.com/locate/labeco

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  1. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  2. Jeffrey Grogger & Steven Haider & Jacob Klerman & Elizabeth Roth, 2003. "The Relationship Between the Economy and the Welfare Caseload: A Dynamic Approach," Working Papers 03-06, RAND Corporation.
  3. 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.
  4. Rebecca M. Blank, 2001. "What Causes Public Assistance Caseloads to Grow?," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 85-118.
  5. Michael J. Boskin & Frederick C. Nold, 1975. "A Markov Model of Turnover in Aid to Families with Dependent Children," Journal of Human Resources, University of Wisconsin Press, vol. 10(4), pages 467-481.
  6. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
  7. J. P. Ziliak & D. N. Figlio & E. E. Davis & L. S. Connolly, "undated". "Accounting for the Decline in AFDC Caseloads: Welfare Reform or Economic Growth?," Institute for Research on Poverty Discussion Papers 1151-97, University of Wisconsin Institute for Research on Poverty.
  8. Robert M. Hutchens, 1981. "Entry and Exit Transitions in a Government Transfer Program: The Case of Aid to Families with Dependent Children," Journal of Human Resources, University of Wisconsin Press, vol. 16(2), pages 217-237.
  9. Jeffrey Grogger & Steven J. Haider & Jacob Klerman, 2003. "Why Did the Welfare Rolls Fall During the 1990's? The Importance of Entry," American Economic Review, American Economic Association, vol. 93(2), pages 288-292, May.
  10. Robert A. Moffitt, 1999. "The Effect of Pre-PRWORA Waivers on AFDC Caseloads and Female Earnings, Income, and Labor Force Behavior," JCPR Working Papers 89, Northwestern University/University of Chicago Joint Center for Poverty Research.
  11. Rebecca M. Blank & Patricia Ruggles, 1993. "When Do Women Use AFDC & Food Stamps? The Dynamics of Eligibility vs. Participation," NBER Working Papers 4429, National Bureau of Economic Research, Inc.
  12. David N. Figlio & James P. Ziliak, 1999. "Welfare Reform, the Business Cycle, and the Decline in AFDC Caseloads," JCPR Working Papers 77, Northwestern University/University of Chicago Joint Center for Poverty Research.
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Cited by:

  1. Cappellari, Lorenzo & Jenkins, Stephen P., 2009. "The dynamics of social assistance benefit receipt in Britain," ISER Working Paper Series 2009-29, Institute for Social and Economic Research.
  2. Bradley Heim, 2015. "Understanding the decline in self-employment among individuals nearing retirement," Small Business Economics, Springer, vol. 45(3), pages 561-580, October.
  3. Todd Elder & Elizabeth Powers, 2007. "A Longitudinal Analysis of Entries and Exits of the Low-Income Elderly to and from the Supplemental Security Income Program," Working Papers wp156, University of Michigan, Michigan Retirement Research Center.
  4. Ellen Meara & Richard Frank, 2006. "Welfare Reform, Work Requirements, and Employment Barriers," NBER Working Papers 12480, National Bureau of Economic Research, Inc.
  5. Lucy Kok & Caren Tempelman & Pierre Koning & Lennart Kroon & Caroline Berden, 2017. "Do Incentives for Municipalities Reduce the Welfare Caseload? Evaluation of a Welfare Reform in the Netherlands," De Economist, Springer, vol. 165(1), pages 23-42, March.

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