Welfare Reform and Children's Short-Run Attainments

Using PIAT Math test score as a measure of attainment, we find that both single mothers' work and welfare use in the first five years of their children's lives have a positive effect on children's outcomes, but this effect declines with initial ability. The higher the initial ability of a child, the lower the positive impact work and welfare have. In fact, in the case of welfare the effect is negative if a child has more than median initial ability. Furthermore, we find that the work requirement reduces a single mother's use of welfare. However, the net effect of the work requirement on a child's test score depends on whether the mother's work brings in enough labor income to compensate for the loss of welfare benefits. We also look at the implications of the welfare eligibility time limit and maternal leave policies on children's outcomes.

Welfare Reform and Children's Short-Run Attainments: A Structural Approach

In this paper, we develop a dynamic structural model of single mothers' work and welfare participation decisions while their children are young. This model is used to measure the effects of mothers' decisions on short run attainments of the children of NLSY 79. Using PIAT Math test score as a measure of attainment, we find that both single mothers' work and welfare use in the first five years of their children's lives have a positive effect on children's outcomes, but this effect declines with initial ability. The higher the initial ability of a child, the lower the positive impact work and welfare have. In fact, in the case of welfare the effect is negative if a child has more than median initial ability. Furthermore, we find that the work requirement reduces a single mother's use of welfare. However, the net effect of the work requirement on a child's test score depends on whether the mother's work brings in enough labor income to compensate for the loss of welfare benefits. We also look at the implications of the welfare eligibility time limit and maternal leave policies on children's outcomes.Welfare reform, childhood cognitive ability, female work, dynamic choice model, maximum likelihood

The Effects of Single Mothers' Welfare Participation and Work Decisions on Children's Attainments

This research examines the effects of mothers' welfare and work decisions on their children's attainments using two types of estimation methods in Stata: (1) an instrumental variables (IV) and (2) a nonlinear simultaneous equation estimation. The estimator employs sibling comparisons in a random effect framework and an instrumental variables approach to address the unobserved heterogeneity that may influence mothers' work and welfare decisions. We use the popular Stata command -ivreg2- to estimate the coefficients. Since production function of a child's ability can be written as a nonlinear function in a mother's decisions, we can also use the -nlsur- command to simulatneously estimate the production function as well as the (first-stage) IV projections. We focus on children who were born to single mothers with twelve or fewer years of schooling. IVs in this study are a mother's expected years of work and welfare use during childhood. The identification comes from the variation in mothers' different economic incentives that arises from the AFDC benefit structures across U.S. states. The estimates imply that, relative to no welfare participation, participating in welfare for one to three years provides up to a 5 percentage point gain in a child's Picture Individual Achievement Test (PIAT) scores. The negative effect of childhood welfare participation on adult earnings found by others is not significant if one accounts for mothers' work decisions. At the estimated values of the model parameters, a mother's number of years of work contributes between $3,000 and$7,000 1996 dollars to her child's labor income, but has no significant effect on the child's PIAT test scores. Finally, children's number of years of schooling is relatively unresponsive to mothers' work and welfare participation choices.

The 1993 EITC Expansion and Low-Skilled Single Mothers’Welfare Use Decision

Previous studies on low-skilled single mothers generally focus on the binary decisions of either welfare use or work. However, work among welfare participants has increased steadily since the mid 1990s. This study estimates the joint probability of the two decisions using a bivariate probit model. I investigate the role of the 1993 EITC expansion on the decline of welfare caseloads.Using monthly welfare use and work information from the Study of Income and Program Participation, I find that the 1993 EITC expansion has at least the same effect on reducing welfare use as the welfare reform initiatives, in particular, welfare time limits. Moreover, the elasticity estimates indicate that single mothers, especially those who were not employed and dependent solely on welfare before the expansion, were more responsive to the EITC expansion than to welfare time limits. Finally, the increase in work among welfare participants is due to the relative ineffectiveness of the policies in reducing the net population of those who are on welfare and work simultaneously.

The Effects of Single Mothers’Welfare Participation and Work Decisions on Children’s Attainments

This research examines the effects of mothers’ welfare and work decisions on their children’s attainments using a random effect instrumental variables (REIV) estimator. The estimator employs sibling comparisons in a random effect framework and an instrumental variables approach to address the unobserved heterogeneity that may influence mothers’ work and welfare decisions. The identification comes from the variation in mothers’ different economic incentives that arises from the AFDC benefit structures across U.S. states. I focus on children who were born to single mothers with twelve or fewer years of schooling. The short-run child attainments under consideration are the Peabody Individual Achievement Test math and reading recognition scores from the Children of the National Longitudinal Survey of Youth 1979 cohort. Long-run attainments are a child’s number of years of schooling by age 25 and his or her early adulthood labor income, drawn from the Panel Study of Income Dynamics. The REIV estimates imply that, relative to no welfare participation, participating in welfare for one to three years provides up to a 5 percentage point gain in a child’s Picture Individual Achievement Test (PIAT) scores. The negative effect of childhood welfare participation on adult earnings found by others is not significant if one accounts for mothers’ work decisions. At the estimated values of the model parameters, a mother’s number of years of work contributes between $3,000 and$7,000 1996 dollars to her child’s labor income, but has no significant effect on the child’s PIAT test scores. Finally, children’s number of years of schooling are relatively unresponsive to mothers’ work and welfare participation choices.

The Determinants of Happiness of China’s Elderly Population

‘‘Three generations under one roof’’ is an old Chinese saying used to describe a desired living arrangement. The traditional concept of happiness for a Chinese elderly person is being able to ‘‘play with grandchildren with candy in mouth, enjoy life with no cares.’’ In a fast-changing economy like China, how does society, especially the elderly themselves, view these traditional values? Using the 2005 Chinese General Social Survey, we study the determinants of happiness of the Chinese elderly. We are particularly interested in whether living with their child and whether living with their grandchild affect the happiness of the elderly. An important empirical concern is that unobserved permanent income may affect both the living arrangements of the elderly and their level of happiness. We include property ownership variables as proxies and also adopt an instrument variable approach to identify the causal relationship between the elderly’s happiness and their living arrangements. We find that, conditional on living with a grandchild, living with one’s child has a negative effect on the elderly’s happiness. Furthermore, elderly Chinese who live with grandchildren are associated with a much higher degree of happiness than their counterparts.This paper is accepted by Journal of Happiness Studies

Welfare Reform and Children's Short-Run Attainments: A Structural Approach

In this paper, we develop a dynamic structural model of single mothers' work and welfare participation decisions while their children are young. This model is used to measure the effects of mothers' decisions on short run attainments of the children of NLSY 79. Using PIAT Math test score as a measure of attainment, we find that both single mothers' work and welfare use in the first five years of their children's lives have a positive effect on children's outcomes, but this effect declines with initial ability. The higher the initial ability of a child, the lower the positive impact work and welfare have. In fact, in the case of welfare the effect is negative if a child has more than median initial ability. Furthermore, we find that the work requirement reduces a single mother's use of welfare. However, the net effect of the work requirement on a child's test score depends on whether the mother's work brings in enough labor income to compensate for the loss of welfare benefits. We also look at the implications of the welfare eligibility time limit and maternal leave policies on children's outcomes

Welfare Reform and Children's Short-Run Attainments: A Structural Approach

In this paper, we develop a dynamic structural model of single mothers' work and welfare participation decisions while their children are young. This model is used to measure the effects of mothers' decisions on short run attainments of the children of NLSY 79. Using PIAT Math test score as a measure of attainment, we find that both single mothers' work and welfare use in the first five years of their children's lives have a positive effect on children's outcomes, but this effect declines with initial ability. The higher the initial ability of a child, the lower the positive impact work and welfare have. In fact, in the case of welfare the effect is negative if a child has more than median initial ability. Furthermore, we find that the work requirement reduces a single mother's use of welfare. However, the net effect of the work requirement on a child's test score depends on whether the mother's work brings in enough labor income to compensate for the loss of welfare benefits. We also look at the implications of the welfare eligibility time limit and maternal leave policies on children's outcomes

Welfare Reform and Children's Short-Run Attainments

Using PIAT Math test score as a measure of attainment, we find that both single mothers' work and welfare use in the first five years of their children's lives have a positive effect on children's outcomes, but this effect declines with initial ability. The higher the initial ability of a child, the lower the positive impact work and welfare have. In fact, in the case of welfare the effect is negative if a child has more than median initial ability. Furthermore, we find that the work requirement reduces a single mother's use of welfare. However, the net effect of the work requirement on a child's test score depends on whether the mother's work brings in enough labor income to compensate for the loss of welfare benefits. We also look at the implications of the welfare eligibility time limit and maternal leave policies on children's outcomes

The Effects of Single Mothers' Welfare Participation and Work Decisions on Children's Attainments

This research examines the effects of mothers' welfare and work decisions on their children's attainments using a random effect instrumental variables (REIV) estimator. The estimator employs sibling comparisons in a random effect framework and an instrumental variables approach to address the unobserved heterogeneity that may influence mothers' work and welfare decisions. The identification comes from the variation in mothers' different economic incentives that arises from the AFDC benefit structures across U.S. states. We focus on children who were born to single mothers with twelve or fewer years of schooling. The short-run child attainments under consideration are the Peabody Individual Achievement Test math and reading recognition scores from the Children of the National Longitudinal Survey of Youth 1979 cohort. Long-run attainments are a child's number of years of schooling by age 25 and his or her early adulthood labor income, drawn from the Panel Study of Income Dynamics. The REIV estimates imply that, relative to no welfare participation, participating in welfare for one to three years provides up to a 5 percentage point gain in a child's Picture Individual Achievement Test (PIAT) scores. The negative effect of childhood welfare participation on adult earnings found by others is not significant if one accounts for mothers' work decisions. At the estimated values of the model parameters, a mother's number of years of work contributes between $3,000 and$7,000 1996 dollars to her child's labor income, but has no significant effect on the child's PIAT test scores. Finally, children's number of years of schooling are relatively unresponsive to mothers' work and welfare participation choices