Welfare Reform and the Intergenerational Transmission of Dependence

79 Pages Posted: 31 Aug 2017

See all articles by Robert Hartley

Robert Hartley

Columbia University

Carlos Lamarche

University of Kentucky

James P. Ziliak

University of Kentucky - Department of Economics

Abstract

We estimate the effect of welfare reform on the intergenerational transmission of welfare participation and related economic outcomes using a long panel of mother-daughter pairs over the survey period 1968–2013 in the Panel Study of Income Dynamics. Because states implemented welfare reform at different times starting in 1992, the cross-state variation over time permits us to quasi-experimentally separate out the effect of mothers' welfare participation during childhood on daughters' economic outcomes in adulthood in the pre-and post-welfare reform periods. We find that a mother's welfare participation increased her daughter's odds of participation as an adult by roughly 30 percentage points, but that welfare reform attenuated this transmission by at least 50 percent, or at least 30 percent over the baseline odds of participation. While we find comparable-sized transmission patterns in daughters' adult use of the broader safety net and other outcomes such as educational attainment and income, there is no diminution of transmission after welfare reform. These results are obtained by addressing nonrandom selection into welfare and are robust to other potential threats to identification from misclassification error, life-cycle age effects, and cross-state mobility.

Keywords: welfare reform, welfare participation, intergenerational transmission, poverty

JEL Classification: I38, J62, H53

Suggested Citation

Hartley, Robert and Lamarche, Carlos and Ziliak, James P., Welfare Reform and the Intergenerational Transmission of Dependence. IZA Discussion Paper No. 10942, Available at SSRN: https://ssrn.com/abstract=3029813

Robert Hartley (Contact Author)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Carlos Lamarche

University of Kentucky ( email )

Lexington, KY 40506
United States

HOME PAGE: http://gattonweb.uky.edu/Faculty/lamarche/

James P. Ziliak

University of Kentucky - Department of Economics ( email )

Lexington, KY 40506
United States

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