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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. Martin Browning & Thomas Crossley, 1996. "Unemployment Insurance Benefit Levels and Consumption Changes," Discussion Papers 96-11, University of Copenhagen. Department of Economics.
  2. 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.
  3. 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.
  4. 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.
  5. Bruce D. Meyer & James X. Sullivan, 2001. "The Effects of Welfare and Tax Reform: The Material Well-Being of Single Mothers in the 1980s and 1990s," NBER Working Papers 8298, National Bureau of Economic Research, Inc.
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  10. James Sullivan, 2005. "Borrowing during unemployment: unsecured debt as a safety net," Proceedings 958, Federal Reserve Bank of Chicago.
  11. 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.
  12. 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.
  13. 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.
  14. Jonathan Gruber & Aaron Yelowitz, 1997. "Public Health Insurance and Private Savings," UCLA Economics Working Papers 772, UCLA Department of Economics.
  15. 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.
  16. Paul Ong & Evelyn Blumenberg, 1998. "Job Access, Commute and Travel Burden among Welfare Recipients," Urban Studies, Urban Studies Journal Limited, vol. 35(1), pages 77-93, January.
  17. Raphael, Steven & Rice, Lorien, 2002. "Car ownership, employment, and earnings," Journal of Urban Economics, Elsevier, vol. 52(1), pages 109-130, July.
  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. 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.
  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. Erik Hurst & James P. Ziliak, 2001. "Welfare Reform and Household Saving," JCPR Working Papers 234, Northwestern University/University of Chicago Joint Center for Poverty Research.
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