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Welfare Reform and the Intergenerational Transmission of Dependence

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  • Hartley, Robert Paul

    () (Columbia University)

  • Lamarche, Carlos

    () (University of Kentucky)

  • Ziliak, James P.

    () (University of Kentucky)

Abstract

We estimate the effect of welfare reform on the intergenerational transmission of welfare participation and related economic outcomes using a long panel of mother-daughter pairs over the survey period 1968–2013 in the Panel Study of Income Dynamics. Because states implemented welfare reform at different times starting in 1992, the cross-state variation over time permits us to quasi-experimentally separate out the effect of mothers' welfare participation during childhood on daughters' economic outcomes in adulthood in the pre-and post-welfare reform periods. We find that a mother's welfare participation increased her daughter's odds of participation as an adult by roughly 30 percentage points, but that welfare reform attenuated this transmission by at least 50 percent, or at least 30 percent over the baseline odds of participation. While we find comparable-sized transmission patterns in daughters' adult use of the broader safety net and other outcomes such as educational attainment and income, there is no diminution of transmission after welfare reform. These results are obtained by addressing nonrandom selection into welfare and are robust to other potential threats to identification from misclassification error, life-cycle age effects, and cross-state mobility.

Suggested Citation

  • Hartley, Robert Paul & Lamarche, Carlos & Ziliak, James P., 2017. "Welfare Reform and the Intergenerational Transmission of Dependence," IZA Discussion Papers 10942, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10942
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    Cited by:

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    2. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Salamanca, Nicolás & Zhu, Anna, 2017. "Intergenerational Disadvantage: Learning about Equal Opportunity from Social Assistance Receipt," IZA Discussion Papers 11070, Institute of Labor Economics (IZA).
    3. Monique De Haan & Ragnhild C. Schreiner, 2018. "The Intergenerational Transmission of Welfare Dependency," CReAM Discussion Paper Series 1810, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    4. Galassi, Gabriela & Koll, David & Mayr, Lukas, 2019. "The Intergenerational Correlation of Employment: Is There a Role for Work Culture?," IZA Discussion Papers 12595, Institute of Labor Economics (IZA).
    5. Gordon B. Dahl & Anne (A.C.) Gielen, 2018. "Intergenerational Spillovers in Disability Insurance," Tinbergen Institute Discussion Papers 18-015/V, Tinbergen Institute.
    6. Cobb-Clark, Deborah A. & Dahmann, Sarah C. & Gielen, Anne C., 2020. "The Intergenerational Effects of Requiring Unemployment Benefit Recipients to Engage in Non-Search Activities," IZA Discussion Papers 13618, Institute of Labor Economics (IZA).
    7. Pier-André Bouchard St-Amant & Louis Perrault, 2019. "Poverty and Savings: Optimal Taxes with Endogenous Discount Factors," Public Finance Review, , vol. 47(5), pages 828-863, September.
    8. Jonathan Davis & Bhashkar Mazumder, 2017. "The Decline in Intergenerational Mobility After 1980," Working Paper Series WP-2017-5, Federal Reserve Bank of Chicago.
    9. Buckles, Kasey, 2017. "Maternal Socio-Economic Status and the Well-Being of the Next Generation(s)," IZA Discussion Papers 10714, Institute of Labor Economics (IZA).
    10. Gabriela Galassi & David Koll & Lukas Mayr, 2019. "The Intergenerational Correlation of Employment: Is There a Role for Work Culture?," Staff Working Papers 19-33, Bank of Canada.
    11. Gabrielle Pepin, 2020. "The Effects of Welfare Time Limits on Access to Financial Resources: Evidence from the 2010s," Upjohn Working Papers and Journal Articles 20-329, W.E. Upjohn Institute for Employment Research.
    12. Godoey, Anna & Reich, Michael & Allegretto, Sylvia, 2019. "Parental Labor Supply: Evidence from Minimum Wage Changes. Working Paper #103-19," Institute for Research on Labor and Employment, Working Paper Series qt1f66h44t, Institute of Industrial Relations, UC Berkeley.

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    More about this item

    Keywords

    welfare reform; welfare participation; intergenerational transmission; poverty;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs

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