Interactions between Welfare Caseloads and Local Labor Markets

16 Pages Posted: 16 Oct 2008

See all articles by Brian C. Hill

Brian C. Hill

Salisbury University

Matthew N. Murray

University of Tennessee, Knoxville - College of Business Administration - Department of Economics

Abstract

This paper provides an empirical examination of interactions between welfare caseloads and local labor markets using data on caseload stocks, entries, and exits. Granger-causality tests show that unemployment rates Granger-cause caseload activity but caseload activity does not Granger-cause unemployment rates. The results also reveal differential dynamics between caseloads and labor market conditions for rural versus metropolitan markets. Several models of one-way association between caseload activity and unemployment rates are presented. The results show that higher unemployment rates are positively associated with welfare caseloads and entries and negatively related to exits.

JEL Classification: I38, R23

Suggested Citation

Hill, Brian C. and Murray, Matthew N., Interactions between Welfare Caseloads and Local Labor Markets. Contemporary Economic Policy, Vol. 26, Issue 4, pp. 539-554, October 2008. Available at SSRN: https://ssrn.com/abstract=1281101 or http://dx.doi.org/10.1111/j.1465-7287.2008.00103.x

Brian C. Hill

Salisbury University ( email )

1101 Camden Ave
Salisbury, MD 21801
United States

Matthew N. Murray

University of Tennessee, Knoxville - College of Business Administration - Department of Economics ( email )

508 Stokely Management Center
Knoxville, TN 37996-0550
United States
865-974-5441 (Phone)

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