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Welfare Reform, Saving, and Vehicle Ownership: Do Asset Limits and Vehicle Exemptions Matter?

  • James X. Sullivan

This paper examines whether AFDC/TANF asset tests affect the asset holdings of low-educated single mothers. Special emphasis is given to vehicle assets that make up a very significant share of total wealth for poor families. Consistent with other recent research, I find little evidence that asset limits have an effect on the amount of liquid assets that single mothers hold. However, I find evidence that vehicle exemptions do have an important effect on vehicle assets. Also, the results indicate that single mothers are not substituting vehicle equity for liquid assets in response to more relaxed restrictions on vehicles.

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File URL: http://jhr.uwpress.org/cgi/reprint/XLI/1/72
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Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 41 (2006)
Issue (Month): 1 ()
Pages:

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Handle: RePEc:uwp:jhriss:v:41:y:2006:i:1:p72-105
Contact details of provider: Web page: http://jhr.uwpress.org/

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  1. Bruce D. Meyer & Dan T. Rosenbaum, 1998. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," JCPR Working Papers 32, Northwestern University/University of Chicago Joint Center for Poverty Research.
  2. J. P. Ziliak, . "Income Transfers and Assets of the Poor," Institute for Research on Poverty Discussion Papers 1202-99, University of Wisconsin Institute for Research on Poverty.
  3. Eric M. Engen & William G. Gale & John Karl Scholz, 1996. "The Illusory Effects of Saving Incentives on Saving," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 113-138, Fall.
  4. Jesus Fernandez-Villaverde & Dirk Krueger, 2004. "Consumption and Saving over the Life Cycle: How Important are Consumer Durables?," 2004 Meeting Papers 357b, Society for Economic Dynamics.
  5. Jonathan Gruber & Aaron Yelowitz, 1997. "Public Health Insurance and Private Savings," UCLA Economics Working Papers 772, UCLA Department of Economics.
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  8. Meyer, Bruce D. & Sullivan, James X., 2004. "The effects of welfare and tax reform: the material well-being of single mothers in the 1980s and 1990s," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1387-1420, July.
  9. Steven Raphael & Michael A. Stoll, 2000. "Can Boosting Minority Car-Ownership Rates Narrow Inter-Racial Employment Gaps," JCPR Working Papers 200, Northwestern University/University of Chicago Joint Center for Poverty Research.
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  13. Martin Browning & Thomas Crossley, 1996. "Unemployment Insurance Benefit Levels and Consumption Changes," Discussion Papers 96-11, University of Copenhagen. Department of Economics.
  14. David Neumark & Elizabeth Powers, 1997. "The Effect of Means-Tested Income Support for the Elderly on Pre-Retirement Saving: Evidence from the SSI Program in the U.S," NBER Working Papers 6303, National Bureau of Economic Research, Inc.
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  17. Cynthia Bansak & Heather Mattson & Lorien Rice, 2005. "On the Road to Self-Sufficiency after Welfare Reform: An Assessment of the Impact of Changes in Welfare Asset Limits on Auto- Ownership Rates and Employment," Working Papers 0001, San Diego State University, Department of Economics.
  18. Jeffrey E. Zabel, 1998. "An Analysis of Attrition in the Panel Study of Income Dynamics and the Survey of Income and Program Participation with an Application to a Model of Labor Market Behavior," Journal of Human Resources, University of Wisconsin Press, vol. 33(2), pages 479-506.
  19. Powers, Elizabeth T., 1998. "Does means-testing welfare discourage saving? evidence from a change in AFDC policy in the United States," Journal of Public Economics, Elsevier, vol. 68(1), pages 33-53, April.
  20. George-Marios Angeletos, 2001. "The Hyberbolic Consumption Model: Calibration, Simulation, and Empirical Evaluation," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 47-68, Summer.
  21. Cochrane, John H, 1991. "A Simple Test of Consumption Insurance," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 957-76, October.
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