Bounding the Labor Supply Responses to a Randomized Welfare Experiment: A Revealed Preference Approach

123 Pages Posted: 12 Jan 2015 Last revised: 10 Jun 2021

See all articles by Patrick Kline

Patrick Kline

University of California, Berkeley - Department of Economics

Melissa Tartari

University of Chicago

Date Written: January 2015

Abstract

We study the short-term impact of Connecticut's Jobs First welfare reform experiment on women's labor supply and welfare participation decisions. A non-parametric optimizing model is shown to restrict the set of counterfactual choices compatible with each woman's actual choice. These revealed preference restrictions yield informative bounds on the frequency of several intensive and extensive margin responses to the experiment. We find that welfare reform induced many women to work but led some others to reduce their earnings in order to receive assistance. The bounds on this latter "opt-in" effect imply that intensive margin labor supply responses are non-trivial.

Suggested Citation

Kline, Patrick and Tartari, Melissa, Bounding the Labor Supply Responses to a Randomized Welfare Experiment: A Revealed Preference Approach (January 2015). Available at SSRN: https://ssrn.com/abstract=2548357

Patrick Kline (Contact Author)

University of California, Berkeley - Department of Economics ( email )

508-1 Evans Hall #3880
Berkeley, CA 94720-3880
United States

Melissa Tartari

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

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