Bounding the Labor Supply Responses to a Randomized Welfare Experiment: A Revealed Preference Approach

Patrick Kline and Melissa Tartari

No 20838, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the short-term impact of Connecticut's Jobs First welfare reform experiment on women's labor supply and welfare participation decisions. A non-parametric optimizing model is shown to restrict the set of counterfactual choices compatible with each woman's actual choice. These revealed preference restrictions yield informative bounds on the frequency of several intensive and extensive margin responses to the experiment. We find that welfare reform induced many women to work but led some others to reduce their earnings in order to receive assistance. The bounds on this latter "opt-in" effect imply that intensive margin labor supply responses are non-trivial.

JEL-codes: C14 H20 J22 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-exp, nep-lab and nep-lma
Note: EFG LS PE TWP
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Citations: View citations in EconPapers (14)

Published as Patrick Kline & Melissa Tartari, 2016. "Bounding the Labor Supply Responses to a Randomized Welfare Experiment: A Revealed Preference Approach," American Economic Review, American Economic Association, vol. 106(4), pages 972-1014, April.

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Journal Article: Bounding the Labor Supply Responses to a Randomized Welfare Experiment: A Revealed Preference Approach (2016)
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