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Are Lone Mothers Responsive to Policy Changes? The Effects of a Norwegian Workfare Reform on Earnings, Education and Poverty

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  • Chiara Pronzato

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  • Magne Mogstad

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Abstract

High welfare dependency and poverty rate among lone mothers prompted a workfare reform of the Norwegian welfare system for lone parents: activity requirements were brought in, time limits imposed and benefit levels raised. To evaluate the reform we introduce an estimator that, unlike the much used difference-in-difference approach, accounts for the fact that policy changes are typically phased in gradually rather than coming into full effect immediately. We find that the reform has not only led to increased earnings and educational attainment – in the process lowering welfare caseloads and therefore easing the government’s financial burden – but also reduced poverty.

Suggested Citation

  • Chiara Pronzato & Magne Mogstad, 2008. "Are Lone Mothers Responsive to Policy Changes? The Effects of a Norwegian Workfare Reform on Earnings, Education and Poverty," CHILD Working Papers wp14_08, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
  • Handle: RePEc:wpc:wplist:wp14_08
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    References listed on IDEAS

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    1. LaLonde, Robert J, 1986. "Evaluating the Econometric Evaluations of Training Programs with Experimental Data," American Economic Review, American Economic Association, vol. 76(4), pages 604-620, September.
    2. 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.
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    5. Christopher A. Swann, 2005. "Welfare Reform When Recipients Are Forward-Looking," Journal of Human Resources, University of Wisconsin Press, vol. 40(1).
    6. Randi Kjeldstad & Marit Rønsen, 2004. "Welfare Rules, Business Cycles, And Employment Dynamics Among Lone Parents In Norway," Feminist Economics, Taylor & Francis Journals, vol. 10(2), pages 61-89.
    7. Arnstein Aassve & Gianni Betti & Stefano Mazzuco & Letizia Mencarini, 2007. "Marital disruption and economic well-being: a comparative analysis," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 170(3), pages 781-799.
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    9. Richard Burkhauser & Greg Duncan & Richard Hauser & Roland Berntsen, 1991. "Wife or frau, women do worse: A comparison of men and women in the United States and Germany after marital dissolution," Demography, Springer;Population Association of America (PAA), vol. 28(3), pages 353-360, August.
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    11. John F. Ermisch & Robert E. Wright, 1991. "Welfare Benefits and Lone Parents' Employment in Great Britain," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 424-456.
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    Cited by:

    1. Chiara Daniela Pronzato, 2015. "Fighting Lone Mothers’ Poverty Through In-Work Benefits: Methodological Issues and Policy Suggestions," CESifo Economic Studies, CESifo, vol. 61(1), pages 95-122.
    2. Pronzato, Chiara D., 2012. "Comparing Quasi-Experimental Designs and Structural Models for Policy Evaluation: The Case of a Reform of Lone Parental Welfare," IZA Discussion Papers 6803, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Welfare; lone mothers; workfare reform; difference-in-difference; activity requirements; time limits; earnings; education; poverty;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J00 - Labor and Demographic Economics - - General - - - General

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