Working Paper: NBER ID: w20838
Authors: Patrick Kline; Melissa Tartari
Abstract: We study the short-term impact of Connecticut's Jobs First welfare reform experiment on women's labor supply and welfare participation decisions. A non-parametric optimizing model is shown to restrict the set of counterfactual choices compatible with each woman's actual choice. These revealed preference restrictions yield informative bounds on the frequency of several intensive and extensive margin responses to the experiment. We find that welfare reform induced many women to work but led some others to reduce their earnings in order to receive assistance. The bounds on this latter "opt-in" effect imply that intensive margin labor supply responses are non-trivial.
Keywords: Labor Supply; Welfare Reform; Revealed Preference
JEL Codes: C14; H20; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Jobs First reform (J68) | women's labor supply increase (J21) |
| Jobs First reform (J68) | women entering workforce (J21) |
| Jobs First reform (J68) | women taking up assistance (I38) |
| Jobs First reform (J68) | women reducing earnings to qualify for welfare (I38) |
| Jobs First reform (J68) | women beginning to work while on welfare (I38) |