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Displacement and Wage Effects of Welfare Reform

In: Finding Jobs: Work and Welfare Reform

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Abstract

In this paper, I consider the displacement and wage effects of welfare reform. Recent welfare reforms are pushing welfare recipients into the labor market. Will jobs obtained by ex-welfare recipients come at the expense of others, who will be "displaced" by losing jobs or having fewer job vacancies available? Will the increased labor supply of welfare recipients stimulate job creation? Will the increased labor supply of welfare recipients depress wages overall, or for women with little education? To address these questions, in this paper I will: provide estimates of how welfare reform will affect labor supply; discuss the forces influencing displacement and wage effects of welfare reform; review previous estimates of wage effects that will occur because of welfare reform; provide new simulations, using several methodologies and estimates, of the displacement and wage effects that will occur because of welfare reform. explore what we can see so far about the labor market effects of welfare reform.
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Suggested Citation

  • Timothy J. Bartik, 2000. "Displacement and Wage Effects of Welfare Reform," Book chapters authored by Upjohn Institute researchers,in: David E. Card & Rebecca M. Blank (ed.), Finding Jobs: Work and Welfare Reform, pages 72-122 W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:uchaps:tjbrsf
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    References listed on IDEAS

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    1. Timothy J. Bartik, "undated". "Who Benefits from Local Job Growth: Migrants or Original Residents?," Upjohn Working Papers and Journal Articles tjb1993rs, W.E. Upjohn Institute for Employment Research.
    2. Timothy J. Bartik, 1993. "The Effects of Local Labor Demand on Individual Labor Market Outcomes for Diffrerent Demographic Groups and the Poor," Upjohn Working Papers and Journal Articles 93-23, W.E. Upjohn Institute for Employment Research.
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    Cited by:

    1. Kaestner, Robert & Kaushal, Neeraj & Van Ryzin, Gregg, 2003. "Migration consequences of welfare reform," Journal of Urban Economics, Elsevier, vol. 53(3), pages 357-376, May.
    2. Darren Lubotsky, 2004. "The Labor Market Effects of Welfare Reform," ILR Review, Cornell University, ILR School, pages 249-266.
    3. Peter B. Dixon & Maureen T. Rimmer, 2005. "The Displacement Effect of Labour-Market Programs: Estimates from the MONASH Model," Centre of Policy Studies/IMPACT Centre Working Papers g-154, Victoria University, Centre of Policy Studies/IMPACT Centre.
    4. Charness, Gary & Levine, David I., 2002. "Changes in the employment contract?: Evidence from a quasi-experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 47(4), pages 391-405, April.
    5. 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.

    More about this item

    Keywords

    welfare reform; displacement; wage effects;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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