Essays in Applied Labor Economics: Immigrant Earnings and Welfare Reform: Dissertation Summary

In this dissertation, I analyze two distinct issues. In the first part, I use a new data source to address an old and rather controversial topic in labor economics: how well immigrants fare in the U.S. labor market. The second part is motivated by the recent overhaul of the federal welfare system and examines whether increased labor market participation by welfare recipients will displace employment or reduce the earnings of other low-skilled workers in the labor market. This is investigated through a study of the 1991 elimination of the General Assistance program in Michigan

The Labor Market Effects of Welfare Reform

The recent reform of the federal welfare system is meant to encourage recipients to leave welfare and enter the workforce. If the reform is successful there are likely to be effects felt throughout the low-- skilled end of the labor market. As former welfare recipients enter the labor market, they may exert downward pressure on wages or displace employment of others already in the labor market. Since there has been limited changes in eligibility for federal welfare programs from which to draw inferences, the magnitude of these labor market effects are open to debate. This study considers these issues in general and evaluates how labor markets in Michigan were affected when the General Assistance program in that state was eliminated in 1991. General Assistance was a large-- scale, state--administered program that provided benefits to people who fell through the cracks in federal anti--poverty programs. In all, about eighty to one--hundred thousand able--bodied adults lost benefits. Increased labor force participation among these people resulted in a decline in weekly hours among high school drop--outs of 1.2 to 2.4 percent. There is little evidence of declines in hourly earnings, except in the Detroit area, where wages fell by about five percent.Welfare reform, General Assistance, labor markets

Kindergarten Entrance Age and Children’s Achievement

Using data from two cohorts of students, we present evidence that children who are relatively old when they enter kindergarten score higher on achievement tests and are less likely to repeat grades or suffer from learning disabilities than their younger classmates. These differences are driven by the accumulation of skill prior to school entry. The test score effects appear during the first few months of kindergarten, before much learning has taken place in school, and are especially pronounced among children from upper-income families. We do not find that the relationship between entrance age and outcomes reflects a heightened ability to learn or greater physical maturity among older children, the most common interpretations of the entrance age effect. The evidence also shows that having older classmates improves a child’s test scores but increases the probability of grade repetition and learning disability diagnoses. 2 I