Are We Understating the Impact of Economic Conditions on Welfare Rolls?

26 Pages Posted: 28 Apr 2011

See all articles by Dan Black

Dan Black

University of Chicago - Harris Public Policy

Terra McKinnish

University of Colorado at Boulder - Department of Economics

Seth G. Sanders

Duke University

Date Written: March 1, 2000

Abstract

In this brief we argue that welfare participation is more sensitive to economic conditions than previously believed. Why? Prior research focused on short-term economic fluctuations and ignored differences between high- and low-skilled workers. As welfare is long-term (i.e., permanent) it makes more sense to make comparisons with long-term economic trends. Also, since low-skilled workers are more likely to end up on welfare, it is proper to focus on their economic opportunities. Thus, we focus on the long-term impact of economic conditions on welfare participation, and we concentrate our analysis on low-skilled workers. Specifically, we analyze long-term changes in the supply of high-paying jobs for coal and steel workers as they affect certain heavy coal- and steel-producing regions of the United States during the 1970s and 1980s. Our findings indicate that welfare participation in these regions closely mirrors the long-term local availability of high-paying jobs for low-skilled workers. This has serious policy implications for the long-term success of welfare reform.

JEL Classification: I38, J31, J65

Suggested Citation

Black, Dan and McKinnish, Terra and Sanders, Seth G., Are We Understating the Impact of Economic Conditions on Welfare Rolls? (March 1, 2000). Available at SSRN: https://ssrn.com/abstract=1824344 or http://dx.doi.org/10.2139/ssrn.1824344

Dan Black (Contact Author)

University of Chicago - Harris Public Policy ( email )

1155 East 60th Street
Chicago, IL 60637
United States

Terra McKinnish

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309-0256
United States

Seth G. Sanders

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

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