Time-inconsistency and Welfare Program Participation: Evidence from the NLSY

Hanming Fang and Dan Silverman

No 1465, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We empirically implement a dynamic structural model of labor supply and welfare program participation for agents with potentially time-inconsistent preferences. Using panel data on the choices of single women with children from the NLSY 1979, we provide estimates of the degree of time-inconsistency, and of its influence on the welfare take-up decision. With these estimates, we conduct counterfactual experiments to quantify the utility loss stemming from the inability to commit to future decisions, and the potential utility gains from commitment mechanisms such as welfare time limits and work requirements.

Keywords: Time inconsistent preferences; Welfare reform; Labor supply (search for similar items in EconPapers)
JEL-codes: I38 J22 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2004-06
New Economics Papers: this item is included in nep-edu
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Citations: View citations in EconPapers (25)

Published in International Economic Review (November 2009), 50(4): 1043-1077

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Related works:
Journal Article: TIME-INCONSISTENCY AND WELFARE PROGRAM PARTICIPATION: EVIDENCE FROM THE NLSY (2009)
Working Paper: Time-Inconsistency and Welfare Program Participation: Evidence from the NLSY (2007)
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