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The Effect of Welfare Reform on the Incomes and Earnings of Low-Income Families: Evidence from the Current Population Survey

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  • Laura Stander Connolly

Abstract

An important question surrounding welfare reform is "What has happened to the earnings and incomes of families who were receiving public assistance when the new policies took effect?" I address this question by examining the impacts of early state-level welfare waivers on the earnings and income growth of welfare recipients. Using a detailed nationally representative data set (the Current Population Survey), I find that 1) early work related welfare reforms generally did not increase the earnings of welfare recipients (with minor exceptions), and 2) waivers often had a negative (but small) effect on the incomes of welfare recipients. In addition, waivers appear to have had a less detrimental effect on rural than on urban recipients. This is an interesting finding in light of research that shows that rural employment and earnings generally lag behind those in urban areas. It suggests that even though rural residents face greater barriers to employment, welfare reform has a smaller marginal effect on rural recipients.

Suggested Citation

  • Laura Stander Connolly, 2000. "The Effect of Welfare Reform on the Incomes and Earnings of Low-Income Families: Evidence from the Current Population Survey," JCPR Working Papers 181, Northwestern University/University of Chicago Joint Center for Poverty Research.
    • Handle: RePEc:wop:jopovw:181
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    References listed on IDEAS

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    1. Davis, Elizabeth E. & Connolly, Laura S. & Weber, Bruce A., 1999. "Employment Outcomes For Low-Income Adults In Rural And Urban Labor Markets," 1999 Annual meeting, August 8-11, Nashville, TN 21624, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Maria Cancian & Robert Haveman & Thomas Kaplan & Daniel Meyer, 1999. "Work, Earnings, and Well-Being after Welfare: What Do We Know?," JCPR Working Papers 73, Northwestern University/University of Chicago Joint Center for Poverty Research.
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    Cited by:

    1. Neil G. Bennett & Hsien-Hen Lu & Younghwan Song, 2002. "Welfare Reform and Changes in the Economic Well-Being of Children," NBER Working Papers 9399, National Bureau of Economic Research, Inc.
    2. Lewis, Dan & Konstantopoulos, Spyros & Altenbernd, Lisa, 2005. "The Correlates of Work in a Post-AFDC World: The Results from a Longitudinal State-Level Analysis," IZA Discussion Papers 1626, Institute of Labor Economics (IZA).

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