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Measuring the Dynamic Effects of Welfare Time Limits

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Abstract
This paper develops a new dynamic panel data model that can formally incorporate the dynamics of welfare participation behavior under time limits. The model is estimated using data from a policy experiment in the United States and a generalized method of moments estimator. The effects of time limits are found to be larger and more dynamical than in previous regression approaches, after comparing estimation results from several approaches using the same data. Around 40 percent of the anticipatory effect of the time limit are due to individuals depleting their stock of remaining months of welfare eligibility. The anticipatory effect is also found to be much larger among disadvantaged individuals. The results call for further assessment of the importance of time limits in explaining the low welfare caseload in the post-welfare reform era.

Suggested Citation

  • Marc K Chan, 2014. "Measuring the Dynamic Effects of Welfare Time Limits," Working Paper Series 23, Economics Discipline Group, UTS Business School, University of Technology, Sydney.
    • Handle: RePEc:uts:ecowps:23
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    File URL: http://www.uts.edu.au/sites/default/files/edg_wp23.pdf
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    References listed on IDEAS

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    Cited by:

    1. Narain, Kimberly & Bitler, Marianne & Ponce, Ninez & Kominski, Gerald & Ettner, Susan, 2017. "The impact of welfare reform on the health insurance coverage, utilization and health of low education single mothers," Social Science & Medicine, Elsevier, vol. 180(C), pages 28-35.

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    More about this item

    Keywords

    Welfare time limit; dynamic panel data model; generalized method of moments; policy experiment;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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