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Are We Understating the Impact of Economic Conditions on Welfare Rolls?

Dan Black (), Terra McKinnish and Seth G.Sanders
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Seth G.Sanders: Department of Economics, University of Maryland

No 18, Center for Policy Research Policy Briefs from Center for Policy Research, Maxwell School, Syracuse University

Abstract: In this brief we argue that welfare participation is more sensitive to economic conditions than previously believed. Why? Prior research focused on short-term economic fluctuations and ignored differences between high- and low-skilled workers. As welfare is long-term (i.e., permanent) it makes more sense to make comparisons with long-term economic trends. Also, since low-skilled workers are more likely to end up on welfare, it is proper to focus on their economic opportunities. Thus, we focus on the long-term impact of economic conditions on welfare participation, and we concentrate our analysis on low-skilled workers. Specifically, we analyze long-term changes in the supply of high-paying jobs for coal and steel workers as they affect certain heavy coal- and steel-producing regions of the United States during the 1970s and 1980s. Our findings indicate that welfare participation in these regions closely mirrors the long-term local availability of high-paying jobs for low-skilled workers. This has serious policy implications for the long-term success of welfare reform.

JEL-codes: I38 J31 J65 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2000-03
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Journal Article: Are We Understanding the Impact of Economic Conditions on Welfare Rolls? (2002)
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