The Impact of Earnings Disregards on the Behavior of Low Income Families

Jordan D. Matsudaira and Rebecca M. Blank

No 14038, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper investigates the impact of changes in earnings disregards for welfare assistance received by single mothers following welfare reform in 1996. Some states adopted much higher earnings disregards (women could work full time and still receive welfare), while other states did not. We explore the effect of these changes on women's labor supply and income using several data sources and multiple estimation strategies. Our results indicate these changes had little effect on labor supply or income. We show this is because few women used these earnings disregards. This is surprising and we discuss why this might occur.

JEL-codes: H53 I38 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2008-05
Note: LS PE
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