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Mon, March 9
Luigi Pistaferri, Consumption Inequality and Family Labor Supply

Sheldon H. Danziger photo

Does It Pay to Move from Welfare to Work?

Publication Abstract

Download PDF versionDanziger, Sheldon H., Colleen M. Heflin, Mary E. Cocoran, E. Oltmans, and H.C. Wang. "Does It Pay to Move from Welfare to Work?" PSC Research Report No. 00-449. August 2000.

Kathryn Edin and Laura Lein (1996; 1997) conducted interviews with wage-reliant and welfare-reliant single mothers between 1988 and 1992, gathering information about income sources, consumption patterns, and experiences of material hardship. They concluded that wage-reliant women fared worse economically than welfare-reliant women. However, the economic boom of the 1990s and increases in federal and state benefits that supplement earnings and subsidize work expenses for the working poor have raised the net income gain associated with moving from welfare to work. In addition, changes in welfare regulations following the 1996 Welfare Reform Act have led more recipients to look for work, have made it much more difficult for nonworking recipients to remain on the welfare rolls, and have made it easier for them to continue to receive welfare benefits if they work part-time at low-wage jobs. We analyze data from a sample of single mothers, all of whom received welfare in February 1997, and find that those who left welfare for work, or who combined work and welfare, had higher household incomes, experienced less material hardship, engaged in fewer activities to make ends meet, and had lower expectations of experiencing hardship in the near future than did nonworking welfare recipients.

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