Does the Availability of High-Wage Jobs for Low-Skilled Men Affect Welfare Expenditures? Evidence from Shocks to the Steel and Coal Industries

Posted: 5 Nov 2002

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

University of Maryland - Department of Economics

Abstract

We study shocks to the coal and steel industries to measure the effect of long-term changes in demand for low-skilled workers on welfare expenditures. The coal and steel industries have historically paid high wages to low-skilled men. We find a substantial increase in welfare expenditures in response to the collapse of the steel and coal industries in the 1980s, and an even more substantial reduction in welfare expenditures during the coal boom of the 1970s. Additional analysis indicates the reduction in welfare expenditures during the coal boom is due in part to a decline in single-parent households.

JEL Classification: H53, I38, J12

Suggested Citation

Black, Dan and McKinnish, Terra and Sanders, Seth G., Does the Availability of High-Wage Jobs for Low-Skilled Men Affect Welfare Expenditures? Evidence from Shocks to the Steel and Coal Industries. Forthcoming, Journal of Public Economics, Vol. 85, No. 2, pp. 185-206. Available at SSRN: https://ssrn.com/abstract=323399

Dan Black

University of Chicago - Harris Public Policy ( email )

1155 East 60th Street
Chicago, IL 60637
United States

Terra McKinnish (Contact Author)

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

Campus Box 256
Boulder, CO 80309-0256
United States

Seth G. Sanders

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States

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