Working Paper: NBER ID: w29054
Authors: Hope Corman; Dhaval M. Dave; Nancy Reichman; Ofira Schwartzsoicher
Abstract: This study estimated the effects of welfare reform in the 1990s, which permanently restructured and contracted the cash assistance system in the U.S., on food insecurity—a fundamental form of hardship—of the next generation of households. An implicit goal underlying welfare reform was the disruption of an assumed intergenerational transmission of disadvantage; however, little is known about the effects of welfare reform on the well-being of the next generation. Using intergenerational data from the Panel Study of Income Dynamics and a variation on a difference-in-differences framework, this study exploits 3 sources of variation in childhood exposure to welfare reform: (1) risk of exposure across birth cohorts; (2) variation of exposure within cohorts because different states implemented welfare reform in different years; and (3) variation between individuals with the same exposure who were more likely and less likely to rely on welfare. We found that exposure to welfare reform led to decreases in food insecurity of the next generation of households, by about 10% for a 5-year increase in exposure, with stronger effects for women, individuals exposed for longer durations during childhood, individuals exposed in early childhood (0-5 years), and individuals whose mothers had a high school education (versus less).
Keywords: welfare reform; food insecurity; intergenerational transmission; economic self-sufficiency
JEL Codes: H53; I14; I3; I38
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exposure to welfare reform (I38) | decrease in food insecurity (I32) |
| exposure to welfare reform (I38) | decrease in food insecurity among next generation of households (D19) |
| early childhood exposure to welfare reform (I38) | decrease in food insecurity (I32) |
| maternal high school education (I24) | decrease in food insecurity due to welfare reform exposure (I38) |
| longer exposure duration to welfare reform (I38) | decrease in food insecurity (I32) |