Welfare Reform When Recipients Are Forward-Looking

Christopher A. Swann

64 citations0/0 files storedThe Journal of Human Resources

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Gender, Labor, and Family Dynamics Labor market dynamics and wage inequality Social Policies and Family

Abstract

In 1996 the Aid to Families with Dependent Children program was replaced with the Temporary Assistance for Needy Families (TANF) program. This paper considers the effects of two specific components of TANF, time limits and work requirements, on employment, marriage, and welfare participation. I use a discrete-choice dynamic programming model and obtain parameter estimates using data from the Panel Study of Income Dynamics. Policy simulations show that a five-year lifetime time limit results in a 60 percent reduction in welfare use and that a substantial part of this reduction occurs because recipients are forward-looking.

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References

1997The analysis of household surveys 1984A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data 1998Numerical Methods in Economics 1987Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher 1997The Career Decisions of Young Men 1992Incentive Effects of the U.S. Welfare System: A Review 1983An Economic Model of Welfare Stigma 1998A Structural Model of Multiple Welfare Program Participation and Labor Supply

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