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ERIC Number: EJ772839
Record Type: Journal
Publication Date: 2002
Pages: 22
Abstractor: Author
Reference Count: 29
ISBN: N/A
ISSN: ISSN-0276-8739
Does It Pay to Move from Welfare to Work?
Danziger, Sheldon; Heflin, Colleen M.; Corcoran, Mary E.; Oltmans, Elizabeth; Wang, Hui-Chen
Journal of Policy Analysis and Management, v21 n4 p671-692 Fall 2002
The 1996 Personal Responsibility and Work Opportunity Reconciliation Act requires welfare recipients to look for work and has made it more difficult for nonworking recipients to remain on the welfare rolls. In addition, the economic boom of the 1990s and changes in federal and state policies have raised the net income gain associated with moving from welfare to work. This paper analyzes data from a panel survey of single mothers, all of whom received welfare in February 1997. In 1999, those who left welfare and were working had a higher household income and lower poverty rate, experienced a similar level of material hardship, engaged in fewer activities to make ends meet, and had lower expectations of experiencing hardship in the near future than did nonworking welfare recipients. Estimations of fixed-effect regressions of income that control for both observable and unobservable time-invariant characteristics show that monthly net income increases by $2.63 for every additional hour of work effort. About 60 percent of the observed monthly income difference between wage-reliant and welfare-reliant mothers can be attributed to differences in their work effort. Thus, after welfare reform, it does pay to move from welfare to work. (Contains 6 tables and 21 footnotes.)
John Wiley & Sons, Inc. Subscription Department, 111 River Street, Hoboken, NJ 07030-5774. Tel: 800-825-7550; Tel: 201-748-6645; Fax: 201-748-6021; e-mail: subinfo@wiley.com; Web site: http://www3.interscience.wiley.com/browse/?type=JOURNAL
Publication Type: Journal Articles; Reports - Evaluative
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Laws, Policies, & Programs: Aid to Families with Dependent Children; Earned Income Tax Credit; Personal Responsibility and Work Opportunities Reconciliation Act; Temporary Assistance for Needy Families