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Intergenerational transmission of welfare dependency: The effects of length of exposure

  • Oscar A. Mitnik

    ()

    (Department of Economics, University of Miami)

It is well documented that a positive correlation exists between receiving welfare as a child and depending on welfare as an adult. However, previous studies have not been able to explore many aspects of this relationship. This paper uses a unique administrative dataset for California, which follows welfare recipients since their teenage years until early adulthood, to study the causal effects of different lengths of welfare exposure as a child (conditional on welfare receipt) on future welfare dependency as a young adult. The econometric analyses in this paper use a recently developed method from the program evaluation literature, based on the estimation of a generalized propensity score (GPS). As in the binary-treatment case the GPS permits removing the biases associated with differences in the observed characteristics of individuals. In addition, for some analyses, family-level unobserved heterogeneity is controlled for by relying on pairs of siblings exposed to different lengths of exposure. The results show that there is no causal effect of length of exposure on future welfare dependency, nor on teenage childbearing. Conditional on teenage childbearing, there are no effects of length of exposure on adult welfare dependency either, but this dependency is almost three times larger for teenage mothers than for non-mothers. All results hold when controlling for unobserved heterogeneity. The results indicate that policies like time-limits are not likely to reduce the intergenerational correlation of welfare dependency.

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File URL: http://moya.bus.miami.edu/~omitnik/PDF_Documents/Intergenerational_Welfare.pdf
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Paper provided by University of Miami, Department of Economics in its series Working Papers with number 0715.

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Length: 47 pages
Date of creation: 14 Jun 2007
Date of revision:
Publication status: Forthcoming: Under Review
Handle: RePEc:mia:wpaper:0715
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Web page: http://www.bus.miami.edu/faculty-and-research/academic-departments/economics/index.html

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  1. John V. Pepper, 2000. "The Intergenerational Transmission Of Welfare Receipt: A Nonparametric Bounds Analysis," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 472-488, August.
  2. C-B. An & R. H. Haveman & B. L. Wolfe, . "The "window problem" in studies of children's attainments: A methodological exploration," Institute for Research on Poverty Discussion Papers 977-92, University of Wisconsin Institute for Research on Poverty.
  3. Phillip B. Levine & David J. Zimmerman, 2000. "Children's Welfare Exposure and Subsequent Development," NBER Working Papers 7522, National Bureau of Economic Research, Inc.
  4. Hilary Williamson Hoynes, 1995. "Does Welfare Play Any Role in Female Headship Decisions?," NBER Working Papers 5149, National Bureau of Economic Research, Inc.
  5. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc.
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  7. 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).
  8. P. B. Levine & D. J. Zimmerman, . "The intergenerational correlation in AFDC participation: Welfare trap or poverty trap?," Institute for Research on Poverty Discussion Papers 1100-96, University of Wisconsin Institute for Research on Poverty.
  9. Saul D. Hoffman & E. Michael Foster, 2000. "AFDC Benefits and Nonmarital Births to Young Women," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 376-391.
  10. Carlos A. Flores & Alfonso Flores-Lagunes, 2007. "Identification and Estimation of Casual Mechanisms and Net Effects of a Treatment," Working Papers 0706, University of Miami, Department of Economics.
  11. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-35, December.
  12. Antel, John J, 1992. "The Intergenerational Transfer of Welfare Dependency: Some Statistical Evidence," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 467-73, August.
  13. Gary Solon & Mary Corcoran & Roger H. Gordon & Deborah Laren, 1987. "Sibling and Intergenerational Correlations in Welfare Program Participation," NBER Working Papers 2334, National Bureau of Economic Research, Inc.
  14. George J. Borjas & Glenn T. Sueyoshi, 1997. "Ethnicity and the Intergenerational Transmission of Welfare Dependency," NBER Working Papers 6175, National Bureau of Economic Research, Inc.
  15. Constantine E. Frangakis & Donald B. Rubin, 2002. "Principal Stratification in Causal Inference," Biometrics, The International Biometric Society, vol. 58(1), pages 21-29, 03.
  16. Kosuke Imai & David A. van Dyk, 2004. "Causal Inference With General Treatment Regimes: Generalizing the Propensity Score," Journal of the American Statistical Association, American Statistical Association, vol. 99, pages 854-866, January.
  17. Sara McLanahan, 1988. "Family structure and dependency: Early transitions to female household headship," Demography, Springer, vol. 25(1), pages 1-16, February.
  18. Heckman, James J & Ichimura, Hidehiko & Todd, Petra E, 1997. "Matching as an Econometric Evaluation Estimator: Evidence from Evaluating a Job Training Programme," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 605-54, October.
  19. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
  20. An, Chong-Bum & Haveman, Robert & Wolfe, Barbara, 1993. "Teen Out-of-Wedlock Births and Welfare Receipt: The Role of Childhood Events and Economic Circumstances," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 195-208, May.
  21. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
  22. Jere R. Behrman & Yingmei Cheng & Petra E. Todd, 2004. "Evaluating Preschool Programs When Length of Exposure to the Program Varies: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 108-132, February.
  23. Gottschalk, Peter, 1996. "Is the correlation in welfare participation across generations spurious?," Journal of Public Economics, Elsevier, vol. 63(1), pages 1-25, December.
  24. Gregory Acs, 1996. "The Impact of Welfare on Young Mothers' Subsequent Childbearing Decisions," Journal of Human Resources, University of Wisconsin Press, vol. 31(4), pages 898-915.
  25. Dan A. Black & Jeffrey Smith, 2003. "How Robust is the Evidence on the Effects of College Quality? Evidence From Matching," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20033, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  26. Jacob Alex Klerman & Steven J. Haider, 2004. "A Stock-Flow Analysis of the Welfare Caseload," Journal of Human Resources, University of Wisconsin Press, vol. 39(4).
  27. Williamson Hoyne, Hilary, 1997. "Does welfare play any role in female headship decisions?," Journal of Public Economics, Elsevier, vol. 65(2), pages 89-117, August.
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