Author ORCID Identifier

https://orcid.org/0000-0002-5640-9169

Year of Publication

2017

Degree Name

Doctor of Philosophy (PhD)

Document Type

Doctoral Dissertation

College

Business and Economics

Department

Economics

First Advisor

Dr. James P. Ziliak

Second Advisor

Dr. Carlos Lamarche

Abstract

This dissertation consists of three essays related to the effects of welfare reform on the intergenerational transmission of welfare participation as well as effects on labor supply and childcare arrangements. States implemented welfare reform at different times from 1992 to 1996, and these policies notably introduced work requirements and other restrictions intended to limit dependency of needy families. One mechanism reforms were intended to address was childhood exposure to a "culture" of ongoing welfare receipt. In Essay 1, I estimate the effect of reform on the transmission of welfare participation for 2961 mother-daughter pairs in the Panel Study of Income Dynamics (PSID) over the period 1968-2013. I find that a mother's welfare participation increased her daughter's odds of participation as an adult by roughly 30 percentage points, but that welfare reform attenuated this transmission by at least 50 percent, or at least 30 percent over the baseline odds of participation. While I find comparable-sized transmission patterns in daughters' adult use of the broader safety net and other outcomes such as educational attainment and income, there is no diminution of transmission after welfare reform. In Essay 2, I estimate behavioral labor supply responses to reforms using experimental data from Connecticut's Jobs First welfare waiver program in 1996. Recent studies have used a distributional analysis of Jobs First suggesting evidence that some individuals reduce hours in order to opt into welfare, an example of behavioral-induced participation. However, estimates obtained by a semi-parametric panel quantile estimator allowing women to vary arbitrarily in preferences and welfare participation costs indicate no evidence of behavioral-induced participation. These findings show that a welfare program imposes an estimated cost up to 10 percent of quarterly earnings, and these costs can be heterogeneous throughout the conditional earnings distribution. Lastly, in Essay 3, I return to PSID data to examine the relationship between welfare spending on childcare assistance and the care arrangements chosen by low-income families. Experimental evidence has shown that formal child care can result in long-term socioeconomic gains for disadvantaged children, and work requirements after welfare reform have necessitated increased demand for child care among single mothers. I find that an increase of a thousand dollars in state-level childcare assistance per child in poverty increases the probability of formal care among low-earnings single-mother families by about 27 to 30 percentage points. When public assistance makes child care more affordable, families within the target population reveal a higher preference for formal care relative to informal, which may be related to perceived quality improvements for child enrichment and development.

Digital Object Identifier (DOI)

https://doi.org/10.13023/ETD.2017.286

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