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Welfare recipient work choice and in-kind benefits in Washington state

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  • Dan Axelsen
  • Dan Friesner
  • Robert Rosenman
  • Hal Snarr

Abstract

We analyze the work choice of welfare recipients. Potential welfare recipients compare their on and off welfare utility from after-tax income and in-kind benefits via employment or welfare, and choose whether to work. Our null hypothesis, which we reject, is that benefits affect only the decision to work or not, not the hours worked, which will depend on wages. Using Temporary Assistance for Needy Families (TANF) administrative data from Washington state, we find that employer provided health insurance and child care subsidies significantly raise exit rates of TANF recipients and induce greater work effort. Other work inducing factors include wages and the Earned Income Tax Credit, while increased levels of Medicaid, Food Stamps and the income guarantee increase welfare dependency.

Suggested Citation

  • Dan Axelsen & Dan Friesner & Robert Rosenman & Hal Snarr, 2007. "Welfare recipient work choice and in-kind benefits in Washington state," Applied Economics, Taylor & Francis Journals, vol. 39(8), pages 1021-1036.
  • Handle: RePEc:taf:applec:v:39:y:2007:i:8:p:1021-1036
    DOI: 10.1080/00036840500461865
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    References listed on IDEAS

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    1. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2005. "Welfare Reform and Health," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
    2. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2005. "Welfare Reform and Health," Journal of Human Resources, University of Wisconsin Press, vol. 40(2).
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    Cited by:

    1. Axelsen, Dan & Underwood, Daniel A. & Friesner, Dan, 2009. "Cultural filtering in the hiring process and its relationship to welfare reform," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(3), pages 495-508, June.
    2. Friesner, Daniel L. & Axelsen, Dan & Underwood, Daniel A., 2008. "What Factors Influence a Welfare Recipient’s Spell Length and Recidivism?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(3), pages 1-14.
    3. Hau Chyi, 2012. "The 1993 EITC expansion and low-skilled single mothers’ welfare use decision," Applied Economics, Taylor & Francis Journals, vol. 44(13), pages 1717-1736, May.
    4. David Zimmer, 2010. "Health Insurance and Health Care Demand Among the Self-employed," Journal of Labor Research, Springer, vol. 31(1), pages 1-19, March.
    5. Murphy, Sean M. & Friesner, Daniel L. & Scott, David M., 2011. "Do In-Kind Benefits Influence Pharmacists’ Labor Supply Decisions?," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 41(1), pages 1-20.

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