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Unintended Consequences? Welfare Reform and the Working Poor

Wellesley College Working Paper No. 98-16

Posted: 13 Jan 1999  

Ann Dryden Witte

Wellesley College - Department of Economics; National Bureau of Economic Research (NBER)

Magaly Queralt

Wellesley Child Care Research Partnership

Tasneem Chipty

Ohio State University

Harriet Griesinger

Wellesley College

Multiple version iconThere are 2 versions of this paper

Date Written: August 1998

Abstract

We have used a unique longitudinal database that incorporates information from diverse administrative and research sources to examine the impact of the early stages of welfare reform on poor working families who do not receive cash assistance. Our data are for 2,791 working poor families from March 1996 through February 1997. Using a number of different estimation techniques, we find that the impact of the simultaneous October 1996 implementation of welfare reform and a federal minimum wage increase was to lower the earnings of the working poor families in our sample by approximately 6%. We find that increases in funding for Child Care Subsidies associated with welfare reform led to a significant increase in earnings. On net, the increase in Child Care Subsidies and the decrease in earnings because of the October 1996 changes approximately cancel out, with the representative family in our sample experiencing an estimated monthly earnings change of between -$18 and $68, with an earnings gain of $25 being most likely.

JEL Classification: H53, I38, J13

Suggested Citation

Witte, Ann Dryden and Queralt, Magaly and Chipty, Tasneem and Griesinger, Harriet, Unintended Consequences? Welfare Reform and the Working Poor (August 1998). Wellesley College Working Paper No. 98-16. Available at SSRN: https://ssrn.com/abstract=129357

Ann Dryden Witte (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Wellesley College - Department of Economics ( email )

106 Central Street
Wellesley, MA 02181
United States
781-283-2163 (Phone)
781-283-2177 (Fax)

Magaly Queralt

Wellesley Child Care Research Partnership ( email )

Wellesley College
Wellesley, MA 02481
United States

Tasneem Chipty

Ohio State University ( email )

410 Arps Hall
Columbus, OH 43210-1172
United States
614-292-2051 (Phone)
614-292-3906 (Fax)

Harriet E. Griesinger

Wellesley College ( email )

106 Central St.
Wellesley, MA 02181
United States

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