Are There Returns to Experience at Low-Skill Jobs? Evidence from Single Mothers in the United States Over the 1990s

Upjohn Institute Working Paper No. 16-255

57 Pages Posted: 15 May 2016

See all articles by Adam Looney

Adam Looney

Brookings Institution; U.S. Department of the Treasury, Office of Tax Analysis (OTA)

Day Manoli

University of Texas at Austin

Date Written: April 12, 2016

Abstract

Policy changes in the United States in the 1990s resulted in sizable increases in employment rates of single mothers. We show that this increase led to a large and abrupt increase in work experience for single mothers with young children. We then examine the economic return to this increase in experience for affected single mothers. Despite the increases in experience, single mothers’ real wages and employment have remained relatively unchanged. The empirical analysis suggests that an additional year of experience increases single mothers’ wage rates by less than 2 percent, a percentage lower than previous estimates in the literature.

Keywords: Wage returns to experience, Welfare reform, Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, Single mothers, Low-skill labor, Current Population Survey, Synthetic cohorts

JEL Classification: J31, I38, J12, J24

Suggested Citation

Looney, Adam and Manoli, Day, Are There Returns to Experience at Low-Skill Jobs? Evidence from Single Mothers in the United States Over the 1990s (April 12, 2016). Upjohn Institute Working Paper No. 16-255, Available at SSRN: https://ssrn.com/abstract=2779088 or http://dx.doi.org/10.2139/ssrn.2779088

Adam Looney (Contact Author)

Brookings Institution ( email )

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HOME PAGE: http://www.brookings.edu/experts/looneya.aspx

U.S. Department of the Treasury, Office of Tax Analysis (OTA) ( email )

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Washington, DC 20220
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Day Manoli

University of Texas at Austin ( email )

2317 Speedway
Austin, TX 78712
United States

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