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The Effects of Welfare-to-Work Program Activities on Labor Market Outcomes

Listed author(s):
  • Dyke, Andrew

    ()

    (University of North Carolina, Chapel Hill)

  • Heinrich, Carolyn J.

    ()

    (University of Texas at Austin)

  • Mueser, Peter R.

    ()

    (University of Missouri-Columbia)

  • Troske, Kenneth

    ()

    (University of Kentucky)

Studies examining the effectiveness of welfare-to-work programs present findings that are mixed and sometimes at odds, in part due to research design, data, and methodological limitations of the studies. We aim to substantially improve on past approaches to estimate program effectiveness by using administrative data on welfare recipients in Missouri and North Carolina to obtain separate estimates of the effects of participating in sub-programs of each state's welfare-to-work program. Using data on all women who entered welfare between the second quarter of 1997 and fourth quarter of 1999 in these states, we follow recipients for sixteen quarters and model their quarterly earnings as a function of demographic characteristics, prior welfare and work experience, the specific types of welfare-to-work programs in which they participate, and time since participation. We focus primarily on three types of subprograms–assessment, job readiness and job search assistance, and more intensive programs designed to augment human capital skills–and use a variety of methods that allow us to compare how common assumptions influence results. In general, we find that the impacts of program participation are negative in the quarters immediately following participation but improve over time, in most cases turning positive in the second year after participation. The results also show that more intensive training is associated with greater initial earnings losses but also greater earnings gains in the long run.

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File URL: http://ftp.iza.org/dp1520.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1520.

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Length: 48 pages
Date of creation: Mar 2005
Handle: RePEc:iza:izadps:dp1520
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  1. repec:mpr:mprres:2955 is not listed on IDEAS
  2. David H. Autor & Susan Houseman, 2005. "Do Temporary Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from 'Work First'," NBER Working Papers 11743, National Bureau of Economic Research, Inc.
  3. Osikominu, Aderonke & Fitzenberger, Bernd & Völter, Robert, 2006. "Get Training or Wait? Long-Run Employment Effects of Training Programs for the Unemployed in West Germany," ZEW Discussion Papers 06-39, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. James J. Heckman, 1989. "Choosing Among Alternative Nonexperimental Methods for Estimating the Impact of Social Programs: The Case of Manpower Training," NBER Working Papers 2861, National Bureau of Economic Research, Inc.
  5. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20035, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
  6. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2000. "The Long-Term Gains from GAIN: A Re-Analysis of the Impacts of the California GAIN Program," NBER Working Papers 8007, National Bureau of Economic Research, Inc.
  7. Gerfin, Michael & Lechner, Michael, 2001. "A Microeconometric Evaluation of Active Labour Market Policy in Switzerland," CEPR Discussion Papers 2993, C.E.P.R. Discussion Papers.
  8. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 2002. "Estimating the returns to community college schooling for displaced workers," Working Paper Series WP-02-31, Federal Reserve Bank of Chicago.
  9. Peter R. Mueser & Kyung-Seong Jeon & Andrew Dyke & Carolyn J. Heinrich & Kenneth R. Troske, 2006. "The Effects of Welfare-to-Work Program Activities on Labor Market Outcomes," Working Papers 0602, Department of Economics, University of Missouri.
  10. Pascal Courty & Gerald Marschke, 2004. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 23-56, January.
  11. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, 01.
  12. Carolyn J. Heinrich & Peter R. Mueser & Kenneth R. Troske, 2005. "Welfare to Temporary Work: Implications for Labor Market Outcomes," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 154-173, February.
  13. Peter R. Mueser & Kenneth Troske & Alexey Gorislavsky, 2003. "Using State Administrative Data to Measure Program Performance," Working Papers 0309, Department of Economics, University of Missouri.
  14. Lechner, Michael, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA).
  15. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2006. "Evaluating the Differential Effects of Alternative Welfare-to-Work Training Components: A Reanalysis of the California GAIN Program," Journal of Labor Economics, University of Chicago Press, vol. 24(3), pages 521-566, July.
  16. Barbara Sianesi, 2004. "An Evaluation of the Swedish System of Active Labor Market Programs in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 133-155, February.
  17. Sheena McConnell & Steven Glazerman, 2001. "National Job Corps Study: The Benefits and Costs of Job Corps," Mathematica Policy Research Reports 19ff8678a108410587c5dfad0, Mathematica Policy Research.
  18. Black, Dan A. & Smith, J.A.Jeffrey A., 2004. "How robust is the evidence on the effects of college quality? Evidence from matching," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 99-124.
  19. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1994. "The returns from classroom training for displaced workers," Working Paper Series, Macroeconomic Issues 94-27, Federal Reserve Bank of Chicago.
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