IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Labor Supply Effects of Welfare Reform

Listed author(s):

Will welfare reform increase unemployment and reduce wages? The answer depends in part on how much welfare reform increases labor supply. This paper considers the labor supply effects of the welfare reforms that have occurred since 1993, when President Clinton entered office with a promise to "end welfare as we know it." The paper reviews previous estimates, and provides new estimates, of how many additional labor force participants have entered the labor force due to welfare reform. I estimate that welfare reform from 1993-96 increased the U.S. labor force by between 100,000 and 300,000 persons. Between 1996, when the major federal welfare reform bill was enacted, and 1998, welfare reform has probably increased the U.S. labor force by at least another 300,000 persons. Assuming current policy trends continue, welfare reform may add another half-million to one-million labor force participants between 1998 and 2005. The cumulative impact of welfare reform from 1993-2005 is likely to add between one and one-and-a-half million persons to the U.S. labor force. This additional labor supply is not huge compared to the U.S. labor force, so welfare reform is unlikely to have large long-run effects on overall wages and unemployment. However, this additional labor supply is large compared to likely growth in labor demand for less-educated women over the 1993-2005 period. As a result, welfare reform is likely to have significant effects on the wages and unemployment rates of less-educated women during the 1993-2005 period.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: This material is copyrighted. Permission is required to reproduce any or all parts.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 98-53.

in new window

Date of creation: Jul 1998
Handle: RePEc:upj:weupjo:98-53
Contact details of provider: Postal:
300 S. Westnedge Ave. Kalamazoo, MI 49007 USA

Phone: 1-269-343-5541
Fax: 1-269-343-7310
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 1063-1114.
  2. J. P. Ziliak & D. N. Figlio & E. E. Davis & L. S. Connolly, "undated". "Accounting for the Decline in AFDC Caseloads: Welfare Reform or Economic Growth?," Institute for Research on Poverty Discussion Papers 1151-97, University of Wisconsin Institute for Research on Poverty.
  3. Timothy J. Bartik, 1997. "Short-Term Employment Persistence for Welfare Recipients: The "Effects" of Wages, Industry, Occupation and Firm," Upjohn Working Papers and Journal Articles 97-46, W.E. Upjohn Institute for Employment Research.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:upj:weupjo:98-53. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.