The Limits to Wage Growth: Measuring the Growth Rate of Wages For Recent Welfare Leavers

David Card, Charles Michalopoulos () and Philip Robins

No 8444, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study the rate of wage growth among welfare leavers in the Self Sufficiency Program (SSP), an experimental earnings subsidy offered to long-term welfare recipients in Canada. Single parents who started working in response to the SSP incentive are younger, less educated, and have more young children than those who would have been working regardless of the program. They also earn relatively low wages in their first few months of work: typically within $1 of the minimum wage. Despite these differences, their rate of wage growth is similar to other welfare leavers. We estimate that people who were induced to work by SSP experienced real wage growth of about 2.5 - 3 percent per year - a rate consistent with conventional measures of the return to experience for similar workers.

JEL-codes: I38 J30 (search for similar items in EconPapers)
Date: 2001-08
New Economics Papers: this item is included in nep-lab, nep-ltv and nep-pke
Note: LS PE
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Citations: View citations in EconPapers (18)

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