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Separating Psychological Costs from Time Costs: Female Labor Supply and Participation in Food Stamps and WIC


  • Colleen Flaherty

    () (Department of Economics, Stanford University)

  • Kevin Mumford

    () (Department of Economics, Stanford University)


Many individuals who are eligible for welfare choose not to participate. This well-documented fact suggests that there is a utility cost associated with welfare participation. Previous studies have produced estimates of how large this cost would have to be to explain the observed degree of non-participation. Prior estimates of this utility cost have not differentiated psychological costs of participation from the time and effort required to become eligible and maintain eligibility (time costs). This paper develops a structural model that allows for the separate estimation of these two types of costs associated with welfare participation in dollar terms. The estimation suggests that psychological costs are three times larger than the time costs of welfare participation.

Suggested Citation

  • Colleen Flaherty & Kevin Mumford, 2007. "Separating Psychological Costs from Time Costs: Female Labor Supply and Participation in Food Stamps and WIC," Discussion Papers 06-024, Stanford Institute for Economic Policy Research.
  • Handle: RePEc:sip:dpaper:06-024

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    References listed on IDEAS

    1. 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.
    2. Keane, Michael & Moffitt, Robert, 1998. "A Structural Model of Multiple Welfare Program Participation and Labor Supply," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 553-589, August.
    3. Moffitt, Robert, 1983. "An Economic Model of Welfare Stigma," American Economic Review, American Economic Association, vol. 73(5), pages 1023-1035, December.
    4. Robert A. Moffitt, 2003. "Means-Tested Transfer Programs in the United States," NBER Books, National Bureau of Economic Research, Inc, number moff03-1, January.
    5. Blundell, Richard & Fry, Vanessa & Walker, Ian, 1987. "Modelling the Take-up of Means-tested Benefits: the Case of Housing Benefits in the United Kingdom," Economic Journal, Royal Economic Society, vol. 98(390), pages 58-74, Supplemen.
    6. Robert A. Moffitt, 2003. "Introduction to "Means-Tested Transfer Programs in the United States"," NBER Chapters,in: Means-Tested Transfer Programs in the United States, pages 1-14 National Bureau of Economic Research, Inc.
    7. Stuber, Jennifer & Schlesinger, Mark, 2006. "Sources of stigma for means-tested government programs," Social Science & Medicine, Elsevier, vol. 63(4), pages 933-945, August.
    8. Riphahn, Regina T., 2000. "Rational Poverty or Poor Rationality? The Take-up of Social Assistance Benefits," IZA Discussion Papers 124, Institute for the Study of Labor (IZA).
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    More about this item


    welfare; psychological cost; time cost;

    JEL classification:

    • I39 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Other


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