Chapter 15 Welfare Reform and Poverty: A Latent Trajectory Model Analysis

Michael J. Camasso and Radha Jagannathan

A chapter in Inequality, Mobility and Segregation: Essays in Honor of Jacques Silber, 2012, pp 393-422 from Emerald Group Publishing Limited

Abstract: This paper examines the effect of welfare reform policies on changes in poverty in the United States during 1992–2005. Using state-level panel data we estimate latent trajectory models to determine if welfare reform has contributed to changes in the trajectories of poverty growth (decline) beyond what would have naturally occurred through the passage of time. Our results show that (a) states vary considerably in both their mean initial level as well as trajectories of poverty; (b) welfare reform was responsible for nearly 27% of the decline in poverty during the study period; (c) the economy played a secondary role, responsible for a 10% reduction in poverty; and (d) income support policies like minimum wage and child support collection also had an important role to play, with the latter contributing as much as welfare reform to poverty reduction. Our estimates remain robust against changes in modeling strategies and methods.

Keywords: Latent trajectory model; poverty; random coefficient model; welfare reform (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eme:reinzz:s1049-2585(2012)0000020018

DOI: 10.1108/S1049-2585(2012)0000020018

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