Identifying the Effect of a Welfare-to-Work Program Using Capacity Constraint: a New York City Quasi-Experinmet

In 1999 general assistance recipients in New York City were required to participate in a job training and outplacement assistance program. Initially, recipients were enrolled in ‘waves’ due to capacity constraints. The program’s impact is identified using a quasiexperiment in which selectees are compared to concomitantly eligible non-selectees. Selectees are 15 percentage points more likely to start a job and 10 percentage points more likely to exit welfare than are non-selectees. This methodology is important since random-assignment experiments can be costly and difficult to implement. Further, experiments are not impervious to criticism; this procedure addresses three of five known shortcomings

Inequality of Happiness: Evidence of the Compression of the Subjective-Well-Being Distribution with Economic Growth

The use of Subjective Wellbeing (SWB) measures in economics research has grown markedly (Kahneman and Krueger 2006). This has come about for at least two reasons. First, the measures have been systematically validated as reliable for examining a range of questions. Second, economists have long relied on income as a proxy for wellbeing. However, research shows that there are potentially large slippages between economic indicators and wellbeing (Diener and Seligman 2004). Thus, SWB measures have become an important alternative proxy for wellbeing. Indeed, SWB measures have also caught the attention of policy makers. The OECD launched the Better Life Index in 2011 as an alternative wellbeing measure; and the former French President Nicolas Sarkozy formed the Stiglitz Commission in 2008 to identify the limits of gross domestic product (GDP) as a measure of wellbeing and to identify alternative measures (Stiglitz, Sen, and Fitoussi 2010). When studying the distribution of income, economists have long recognized the importance of examining measures of central tendency and dispersion, as the latter are necessary to understand income inequality and poverty (Stiglitz, Sen, and Fitoussi 2010). Thus, there is a vast literature analyzing both the first and second moments of the distribution of income. For example, the Lorenz and Kuznets curves try to model the distribution of income, and the Gini coefficient summarizes the entire distribution in a scalar (see Atkinson 1970; Gastwirth 1972; Gini 1921; Gottschalk and Smeeding 1887; Kuznets 1955; and Lorenz 1905). In contrast, the vast majority of SWB research focuses on mean SWB. Given the current interest in SWB measures, and recognizing that the entire distribution of SWB merits study, we believe it is important to study SWB inequality (dispersion) as well as mean SWB. In this paper, we contribute to the emerging SWB literature by investigating the relationship between economic growth and SWB inequality using data from the World Values Survey (WVS) and the World Bank’s World Development Indicators (WDI). The results suggest that economic growth is inversely related to SWB inequality in cross-sectional analysis. There is also some evidence from time-series analysis that countries that experience greater economic growth rates also experience the greater decreases in SWB inequality, although this pattern does not hold for two of the fastest growing countries in the dataset. This is important because it indicates that economic growth may reduce SWB inequality over time, even if it does not increase mean SWB. The paper proceeds as follows. Section II reviews the related literature. Section III describes the data. Section IV presents the results. Section V concludes

The Great Recession and Life Satisfaction: The Unique Decline for Americans Approaching Retirement Age

During the 2007-09 Great Recession, the American economic environment was bleak: unemployment roughly doubled, median household incomes fell 5 per cent, average household net worth declined by a third, and consumer spending dropped markedly. Each month, the Bureau of Labor Statistics reported massive lay-offs, disappointing job creation numbers, and a dismal outlook for future job growth. The literature studying the impact of the Great Recession on American households finds that those nearing retirement age were particularly hard hit. For example, using data from the American Life Panel, Hurd and Rohwedder (2010) find that 25 per cent of respondents aged 50-59 lost at least 35 per cent of their retirement savings, and many took early retirement due to unemployment. Chakrabarti et al. (2015) corroborate these findings using data from credit report records and various household surveys. Using asset and labour market data from the Health and Retirement Study, Gustman et al. (2012) find that those approaching retirement age during the Great Recession lost retirement wealth, whereas older cohorts gained retirement wealth when they had approached retirement age prior to the Great Recession. We explore the effects of the Great Recession on the SWB of adult working-age Americans and conduct various analyses to examine whether those approaching retirement age were more adversely impacted. 1 We use a difference-in-differences (DD) approach, comparing the change in pre- to post-recession SWB of those approaching retirement age to younger working-age adults. For younger working-age adults, we find no difference in their pre-to post-recession SWB. In contrast, we find that the post-recession SWB of those approaching retirement age was significantly lower than prerecession. We explore channels through which the Great Recession may have differentially impacted the SWB of those approaching retirement age and find evidence suggestive of wealth effects. The result and mechanism are specific to a context in which the institution of retirement is the norm and is funded with personal wealth; this is increasingly relevant as countries develop economically, and older adults become less likely to finance consumption with labour income

The increasing happiness of US parents

Previous research suggests that parents may be less happy than non-parents. We critically assess the literature and examine parents’ and non-parents’ happiness-trends using the General Social Survey (N = 42,298) and DDB Lifestyle Survey (N = 75,237). We find that parents are becoming happier over time relative to non-parents, that non-parents’ happiness is declining absolutely, and that estimates of the parental happiness gap are sensitive to the time-period analyzed. These results are consistent across two datasets, most subgroups, and various specifications. Finally, we present evidence that suggests children appear to protect parents against social and economic forces that may be reducing happiness among non-parents

General Assistance Recipients and Welfare-To-Work Programs: Evidence from New York City

General Assistance (GA) programs are virtually unstudied. Yet, GA programs serve an economically vulnerable, non-trivial population that should be of interest. To begin to address this shortcoming, two welfare-to-work programs, in which GA recipients participated, are studied. Using a quasi-experimental approach, the effect of each program on welfare use and employment is estimated. The results indicate that each program significantly increased welfare exits and that the second program significantly increased employment (employment data was unavailable for the first program)

The Happiness of Single Mothers after Welfare Reform

U.S. welfare and tax policies targeting single mothers were transformed over a decade ago. What was the impact on single mothers\u27 happiness? Using data from the General Social Survey, difference in difference estimators are calculated. The results appear to indicate that the package of welfare and tax policy changes increased happiness. The results are largely consistent across three comparison groups and robust to various specification checks. This research nicely complements the literature by examining the impact of the welfare and tax policy changes on a novel outcome measure, self-reported happiness

Pricing Competition: A New Laboratory Measure of Gender Differences in the Willingness to Compete

Experiments have demonstrated that men are more willing to compete than women. We develop a new instrument to “price” willingness to compete. We find that men value a $2.00 winner-take-all payment significantly more (about$0.28 more) than women; and that women require a premium (about 40 %) to compete. Our new instrument is more sensitive than the traditional binary-choice instrument, and thus, enables us to identify relationships that are not identifiable using the traditional binary-choice instrument. We find that subjects who are the most willing to compete have high ability, higher GPA’s (men), and take more STEM courses (women)

Affect and Overconfidence: A Laboratory Investigation

We conduct two incentivized random-assignment experiments to investigate whether overconfidence is impacted by (1) incidental mild positive affect, or (2) incidental mild negative affects-anger, fear, and sadness. We measure overconfidence using overestimation of past quiz-performance and overestimation of past quiz-performance compared to peers. The results of the first experiment indicate that the effect of positive affect on both measures of overconfidence is positive and significant for male subjects. While mood-inducement is equally successful for female subjects, their overconfidence is unaffected by positive affect. These positive-affect results are robust to various specification checks. In the second experiment, we find consistent evidence of neither anger, fear, nor sadness\u27s effect on overconfidence; the lack of a result is attributable either to a genuine lack of relationship between these affects and overconfidence or to confounded mood-inducements. The effect of positive affect on overconfidence may help explain the relationship between mood and speculative bubbles and between mood and trading volume. Further, our results have implications for the effect of happiness on overconfidence and the role of emotions in economic decision-making, in general. Finally, we examine the neural evidence supported by our data

Trends in the Happiness of Single Mothers: Evidence from the General Social Survey

We study the subjective well being (SWB) of single mothers from 1972 to 2008 using data from the General Social Survey. While past literature has examined the outcomes of single mothers, an investigation of SWB is warranted, since it has been shown that there are potentially large slippages between economic indicators and SWB. Our results indicate that (i) single mothers report being significantly less happy than non-single-mothers, and (ii) this happiness gap shrank between 1972 and 2008

The rapid evolution of homo economicus: Brief exposure to neoclassical assumptions increases self-interested behavior

Economics students have been shown to exhibit more selfishness than other students. Because the literature identifies the impact of long-term exposure to economics instruction (e.g., taking a course), it cannot isolate the specific course content responsible; nor can selection, peer effects, or other confounds be properly controlled for. In a laboratory experiment, we use a within- and across-subject design to identify the impact of brief, randomly-assigned economics lessons on behavior in the ultimatum game (UG), dictator game (DG), prisoner\u27s dilemma (PD), and public-goods game (PGG). We find that a brief lesson that includes the assumptions of self-interest and strategic considerations moves behavior toward traditional economic rationality in UG, PD, and DG. Despite entering the study with higher levels of selfishness than others, subjects with prior exposure to economics instruction have similar training effects. We show that the lesson reduces efficiency and increases inequity in the UG. The results demonstrate that even brief exposure to commonplace neoclassical economics assumptions measurably moves behavior toward self-interest