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Marriage, Labor Supply and the Dynamics of the Social Safety Net

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Listed:
  • Hamish Low
  • Costas Meghir
  • Luigi Pistaferri
  • Alessandra Voena

Abstract

The 1996 US welfare reform introduced time limits on welfare receipt. We use quasi-experimental evidence and a lifecycle model of marriage, divorce, program participation, labor supply and savings to understand the impact of time limits on behavior and well-being. Time limits cause women to defer claiming in anticipation of future needs, an effect that depends on the probabilities of marriage and divorce. Time limits cost women 0.5% of life-time consumption, net of revenue savings redistributed by reduced taxation, with some groups affected much more. Expectations over future marital status are important determinants of the value of the social safety net.

Suggested Citation

  • Hamish Low & Costas Meghir & Luigi Pistaferri & Alessandra Voena, 2018. "Marriage, Labor Supply and the Dynamics of the Social Safety Net," NBER Working Papers 24356, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24356
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    More about this item

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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