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The Impact of Welfare Reform on the Employment and Labor Supply of Female High School Dropouts

  • Jeffrey T. Lewis
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    Welfare participation began to decline dramatically and low-skill female employment began to rise substantially in the United States during the 1990's. Two competing explanations for these developments are the strong economy and welfare reform. Using pooled cross-sectional data from the 1989-2004 CPS-ORG surveys and employing a sample of female high school dropouts that is not restricted to unmarried women or single mothers, I find that TANF is associated with an increase in both employment and labor supply. The results in this paper, then, strengthen the case in the literature that it was not just the strong economy but also federal welfare reform that contributed to the work gains of low-skill women in the post-1996 period.

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    Article provided by New York State Economics Association (NYSEA) in its journal New York Economic Review.

    Volume (Year): 38 (2007)
    Issue (Month): 1 ()
    Pages: 37-60

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    Handle: RePEc:nye:nyervw:v:38:y:2007:i:1:p:37-60
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    1. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 1063-1114.
    2. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2003. "Welfare Reform and Children's Living Arrangements," Working Papers 111, RAND Corporation.
    3. Robert Kaestner & Neeraj Kaushal, 2005. "Immigrant and native responses to welfare reform," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(1), pages 69-92, 07.
    4. Rebecca M. Blank & Robert F. Schoeni, 2003. "Changes in the Distribution of Children's Family Income over the 1990's," American Economic Review, American Economic Association, vol. 93(2), pages 304-308, May.
    5. Robert F. Schoeni & Rebecca M. Blank, 2000. "What Has Welfare Reform Accomplished? Impacts on Welfare Participation, Employment, Income, Poverty, and Family Structure," Working Papers 00-02, RAND Corporation.
    6. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2002. "The Impact of Welfare Reform on Living Arrangements," NBER Working Papers 8784, National Bureau of Economic Research, Inc.
    7. Neeraj Kaushal & Robert Kaestner, 2001. "From Welfare to Work: Has Welfare Reform Worked?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(4), pages 699-719.
    8. 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.
    9. Marianne Bitler & Jonah Gelbach & Hilary Hoynes & Madeline Zavodny, 2004. "The impact of welfare reform on marriage and divorce," Demography, Springer;Population Association of America (PAA), vol. 41(2), pages 213-236, May.
    10. 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.
    11. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2003. "Some Evidence on Race, Welfare Reform, and Household Income," American Economic Review, American Economic Association, vol. 93(2), pages 293-298, May.
    12. Hanming Fang & Michael P. Keane, 2004. "Assessing the Impact of Welfare Reform on Single Mothers," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(1), pages 1-116.
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