A dynamic model of welfare reform

Chan, MK

A dynamic model of welfare reform

Chan, MK

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Publication Type:: Journal Article
Citation:: Econometrica, 2013, 81 (3), pp. 941 - 1001
Issue Date:: 2013-05-01

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Field	Value	Language
dc.contributor.author	Chan, MK https://orcid.org/0000-0002-1010-7587	en_US
dc.date.issued	2013-05-01	en_US
dc.identifier.citation	Econometrica, 2013, 81 (3), pp. 941 - 1001	en_US
dc.identifier.issn	0012-9682	en_US
dc.identifier.uri	http://hdl.handle.net/10453/23450
dc.description.abstract	A dynamic structural model of labor supply, welfare participation, and food stamp participation is estimated using the 1992, 1993, and 1996 panels of the Survey of Income and Program Participation. Details of various policies including welfare time limits, work requirements, and Earned Income Tax Credit (EITC) are incorporated formally in the budget constraint. Policy simulations reveal that the economy accounts for half of the increase in the labor supply of female heads of family between 1992 and 1999. A time limit results in a larger efficiency gain than a work requirement or a direct reduction in welfare benefits. A reform package can lead to both a reduction in the government expenditure and an improvement in utility. The EITC expansion results in a substantial efficiency gain among individuals with the lowest expected wage. These individuals are almost unaffected by the economic expansion, but their income and utility increase significantly under the reform package. © 2013 The Econometric Society.	en_US
dc.relation.ispartof	Econometrica	en_US
dc.relation.isbasedon	10.3982/ECTA9075	en_US
dc.subject.classification	Econometrics	en_US
dc.title	A dynamic model of welfare reform	en_US
dc.type	Journal Article
utslib.citation.volume	3	en_US
utslib.citation.volume	81	en_US
utslib.for	1505 Marketing	en_US
utslib.for	1403 Econometrics	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	closed_access
pubs.issue	3	en_US
pubs.publication-status	Published	en_US
pubs.volume	81	en_US

Abstract:

A dynamic structural model of labor supply, welfare participation, and food stamp participation is estimated using the 1992, 1993, and 1996 panels of the Survey of Income and Program Participation. Details of various policies including welfare time limits, work requirements, and Earned Income Tax Credit (EITC) are incorporated formally in the budget constraint. Policy simulations reveal that the economy accounts for half of the increase in the labor supply of female heads of family between 1992 and 1999. A time limit results in a larger efficiency gain than a work requirement or a direct reduction in welfare benefits. A reform package can lead to both a reduction in the government expenditure and an improvement in utility. The EITC expansion results in a substantial efficiency gain among individuals with the lowest expected wage. These individuals are almost unaffected by the economic expansion, but their income and utility increase significantly under the reform package. © 2013 The Econometric Society.

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http://hdl.handle.net/10453/23450