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Welfare Reform and Children's Short-Run Attainments: A Structural Approach

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  • Chyi, Hau
  • Ozturk, Orgul

Abstract

In this paper, we develop a dynamic structural model of single mothers' work and welfare participation decisions while their children are young. This model is used to measure the effects of mothers' decisions on short run attainments of the children of NLSY 79. Using PIAT Math test score as a measure of attainment, we find that both single mothers' work and welfare use in the first five years of their children's lives have a positive effect on children's outcomes, but this effect declines with initial ability. The higher the initial ability of a child, the lower the positive impact work and welfare have. In fact, in the case of welfare the effect is negative if a child has more than median initial ability. Furthermore, we find that the work requirement reduces a single mother's use of welfare. However, the net effect of the work requirement on a child's test score depends on whether the mother's work brings in enough labor income to compensate for the loss of welfare benefits. We also look at the implications of the welfare eligibility time limit and maternal leave policies on children's outcomes.

Suggested Citation

  • Chyi, Hau & Ozturk, Orgul, 2006. "Welfare Reform and Children's Short-Run Attainments: A Structural Approach," MPRA Paper 10228, University Library of Munich, Germany, revised 2008.
    • Handle: RePEc:pra:mprapa:10228
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    References listed on IDEAS

    as
    1. Eliana Garces & Duncan Thomas & Janet Currie, 2002. "Longer-Term Effects of Head Start," American Economic Review, American Economic Association, vol. 92(4), pages 999-1012, September.
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    3. M. Anne Hill & June O'Neill, 1994. "Family Endowments and the Achievement of Young Children with Special Reference to the Underclass," Journal of Human Resources, University of Wisconsin Press, vol. 29(4), pages 1064-1100.
    4. Mary Corcoran & Roger Gordon & Deborah Laren & Gary Solon, 1992. "The Association between Men's Economic Status and Their Family and Community Origins," Journal of Human Resources, University of Wisconsin Press, vol. 27(4), pages 575-601.
    5. Currie, Janet & Thomas, Duncan, 1995. "Does Head Start Make a Difference?," American Economic Review, American Economic Association, vol. 85(3), pages 341-364, June.
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    7. Michael P. Keane & Kenneth I. Wolpin, 2002. "Estimating Welfare Effects Consistent with Forward-Looking Behavior. Part I: Lessons from a Simulation Exercise," Journal of Human Resources, University of Wisconsin Press, vol. 37(3), pages 570-599.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Welfare reform; childhood cognitive ability; female work; dynamic choice model; maximum likelihood;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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