A new idea for welfare reform

This article analyzes several proposals to build work incentives into the U.S. welfare system. It concludes that the most cost effective way to do that is to offer a work subsidy to all low-income single parents—in other words, to simply pay them for working in the labor market. This conclusion is based on a model of the labor force participation behavior of low-income single mothers that the author developed with Robert Moffitt. Among the proposals evaluated in the article, besides the work subsidy, are proposals to reduce the rate that welfare benefits are reduced when welfare recipients work, to provide wage subsidies to low-wage workers, to expand the earned income tax credit, and to subsidize the fixed costs of working.Welfare

Comparison of pasture and concentrate finishing of Holstein Friesian, Aberdeen Angus × Holstein Friesian and Belgian Blue × Holstein Friesian steers

peer-reviewedCrossbreeding Holstein Friesian dairy cows with both early and late maturing beef breed bulls is common in Ireland. This study concerned the comparison of spring-born Holstein Friesian (HF), Aberdeen Angus × Holstein Friesian (AA) and Belgian Blue × Holstein Friesian (BB) steers slaughtered directly off pasture in the autumn or following a period of concentrate finishing indoors. Male calves (18 per breed type) were reared together until August of their second year when they were assigned to a 3 (breed type) × 3 (finishing strategy) factorial experiment. The three finishing strategies were (i) pasture only for 94 days to slaughter (PE), (ii) concentrate ad libitum indoors for 94 days to slaughter (CE), and (iii) pasture only for 94 days followed by concentrate ad libitum indoors for 98 days to slaughter (PC). For HF, AA, and BB, mean carcass weight, carcass conformation score and carcass fat score values were 275, 284 and 301 (s.e. 5.1) kg, 1.75, 2.42 and 2.89 (s.e. 0.11), and 2.48, 2.89 and 2.17 (s.e. 0.11), respectively. Pasture alone supported live-weight and carcass-weight gains of approximately 800 g/day and 400 g/day, respectively. Live-weight and carcass-weight gains on concentrate ad libitum were approximately 1400 and 870 g/day, respectively. For PE, CE and PC, mean carcass weight, carcass conformation score and carcass fat score values were 244, 287 and 329 (s.e. 5.1) kg, 1.81, 2.56 and 2.69 (s.e. 0.11), and 1.83, 2.71 and 3.01 (s.e. 0.11), respectively. It is concluded that none of the breed types reached an acceptable carcass weight on PE and only HF had acceptable carcass finish. All breed types were acceptably finished on both concentrate finishing strategies

Effects of feeding management and breed type on muscle chemical composition and relationships between carcass and muscle compositional traits in steers

peer-reviewedThere is little published information on the chemical composition of muscle from beef steers produced in Irish production systems. The objective of this study was to determine the effects of feeding management and breed type on m. longissimus chemical composition of steers, and to examine relationships between selected carcass traits and measures of carcass and muscle composition. A total of 117 steers (65 Friesians and 52 Charolais Friesians) were assigned on weight within breed type to a pre-experimental slaughter group and to one of 12 finishing groups (6 feeding treatments by 2 finishing periods). The 6 feeding treatments were: (1) silage only offered ad libitum (SO), (2) and (3) SO plus a low concentrate level, (4) and (5) SO plus a high concentrate level, (6) concentrates ad libitum. In Treatments 2 and 4, the silage and concentrates were offered separately whereas in Treatments 3 and 5 they were offered as a total mixed ration (TMR). The two finishing periods were 105 and 175 days. Mean low, high and ad libitum concentrate levels were proportionately 0.415, 0.732 and 0.927, respectively, of daily dry matter intake. Carcass weight, fat depth, fat proportion in the rib joint and m. longissimus lipid concentration all increased (P < 0.01) asymptotically with increasing concentrate level. Carcass fat class (P < 0.07), perinephric plus retroperitoneal fat weight (P < 0.001), fat depth (P < 0.06), fat proportion in the rib joint (P < 0.001) and m. longissimus lipid concentration (P < 0.001) were higher for Friesians than for Charolais crosses. Carcass weight increased (P < 0.001) with increased duration of the finishing period, as did carcass fat class (P < 0.06), fat proportion in the rib joint (P < 0.001) and m. longissimus lipid concentration (P < 0.001). Method of feeding had no effect on any of the traits measured

A computationally practical simulation estimation algorithm for dynamic panel data models with unobserved endogenous state variables

This paper develops a new simulation estimation algorithm that is particularly useful for estimating dynamic panel data models with unobserved endogenous state variables. The new approach can deal with the commonly encountered and widely discussed ``initial conditions problem,'' as well as the more general problem of missing state variables at any point during the sample period. Repeated sampling experiments on a dynamic panel data probit model with serially correlated errors indicate that the estimator has good small sample properties and is computationally practical for use with panels of the size that are likely to be encountered in practice. <br><br> Keywords; initial conditions, missing data, discrete choice, simulation estimation

Optimising The Response To Supplementary Concentrates By Beef Cattle In Winter

End of project reportConcentrates are a major component of feed costs in winter finishing of beef cattle. Two separate experiments were carried out to evaluate the response to increasing supplementary concentrate level with grass silage and the effects of feeding the silage and concentrates separately or as a total mixed ration (TMR). In experiment 1, a total of 117 finishing steers (initial live weight 538 kg, s.d. 35.5) were assigned to a preexperimental slaughter group of 9 animals and to 6 feeding treatments of 18 animals each. The feeding treatments were: 1) silage (SO) only offered ad libitum, 2) SO plus a low level of concentrates offered separately (LS), 3) SO plus a low level of concentrates offered as a TMR (LM), 4) SO plus a medium level of concentrates offered separately (MS), 5) SO plus a medium level of concentrates offered as a TMR (MM), and 6) concentrates ad libitum plus a restricted silage allowance (AL). Low and medium target concentrate levels were 3 and 6 kg dry matter (DM) per head daily. When silage and concentrates were fed separately, the daily concentrate allowance was given in one morning feed. The animals were individually fed for a mean period of 132 days. After slaughter, carcasses were weighed and graded and the ribs joint was dissected into its component tissues. Silage DM intake decreased but total DM intake increased with increasing concentrate level. Live weight gains for SO, LS, LM, MS, MM and AL were 0.34, 0.86, 0.86, 1.02, 1.00 and 1.12 (s.e. 0.064) kg/day, respectively. Corresponding carcass weight gains were 0.25, 0.58, 0.58, 0.71, 0.68 and 0.82 (s.e. 0.028) kg/day. All measures of fatness increased, ribs joint bone proportion decreased, and muscle proportion was not significantly affected by dietary concentrate level. There were no significant interactions between concentrate level and method of feeding. Compared with offering the feeds separately, feeding a TMR increased silage DM intake by proportionately 0.06 and total DM intake by proportionately 0.04. Otherwise, method of feeding had no significant effect on performance, slaughter or carcass traits. Mean rumen pH decreased while ammonia concentration tended to increase with increasing concentrate level. Total volatile fatty acids and the acetate to propionate ratio were lowest for SO. Method of feeding had no significant effect on rumen fermentation

Exploring the Usefulness of a Non-Random Holdout Sample for Model Validation: Welfare Effects on Female Behavior

Opportunities for external validation of behavioral models in the social sciences that are based on randomized social experiments or on large regime shifts, that can be treated as experiments for the purpose of model validation, are extremely rare. In this paper, we consider an alternative approach, namely mimicking the essential element of regime change by non-randomly holding out from estimation a portion of the sample that faces a significantly different policy regime. The non-random holdout sample is used for model validation/selection. We illustrate the non-random holdout sample approach to model validation in the context of a model of welfare program participation. The policy heterogeneity that we exploit to generate a non-random holdout sample takes advantage of the wide variation across states that has existed in welfare policy.Model validation, Hold-out sample, Public welfare

A Computationally Practical Simulation Estimation Algorithm for Dynamic Panel Data Models with Unobserved Endogenous State Variables

This paper develops a simulation estimation algorithm that is particularly useful for estimating dynamic panel data models with unobserved endogenous state variables. The new approach can easily deal with the commonly encountered and widely discussed “initial conditions problem,” as well as the more general problem of missing state variables during the sample period. Repeated sampling experiments on dynamic probit models with serially correlated errors indicate that the estimator has good small sample properties. We apply the estimator to a model of married women’s labor force participation decisions. The results show that the rarely used Polya model, which is very difficult to estimate given missing data problems, fits the data substantially better than the popular Markov model. The Polya model implies far less state dependence in employment status than the Markov model. It also implies that observed heterogeneity in education, young children and husband income are much more important determinants of participation, while race is much less important.Initial Conditions, Missing Data, Simulation, Female Labor Force Participation Decisions

The Role of Labor and Marriage Markets, Preference Heterogeneity and the Welfare System in the Life Cycle Decisions of Black, Hispanic and White Women

Using data from the NLSY79, we structurally estimate a dynamic model of the life cycle decisions of young women. The women make joint and sequential decisions about school attendance, work, marriage, fertility and welfare participation. We use the model to perform a set of counterfactual simulations designed to shed light on three questions: (1) How much of observed minority-majority differences in behavior can be attributed to differences in labor market opportunities, marriage market opportunities, and preference heterogeneity? (2) How does the welfare system interact with these factors to augment those differences? (3) How can new cohorts that grow up under the new welfare system (TANF) be expected to behave compared to older cohorts?female life cycle behavior, labor market opportunities, marriage market opportunities, public welfare

Are economic forecasts rational?

This paper discusses at an undergraduate level how forecast rationality can be tested. It explains that forecasters should correctly use any relevant information they knew in making their predictions. It shows that forecast rationality can be tested by determining whether the forecasters' prediction errors are predictable. After addressing what data and methods can be used for testing rationality, the paper presents tests of the price-forecast rationality of individual professional forecasters. Unlike results of previous studies, the test results show that those forecasters' price predictions appear to be rational.Forecasting ; Rational expectations (Economic theory)

Sources of Advantageous Selection: Evidence from the Medigap Insurance Market

We provide strong evidence of advantageous selection in the Medigap insurance market, and analyze its sources. Using Medicare Current Beneficiary Survey (MCBS) data, we find that, conditional on controls for the price of Medigap, medical expenditures for senior citizens with Medigap coverage are, on average, about $4,000 less than for those without. But, if we condition on health, expenditures for seniors on Medigap are about$2,000 more. These two findings can only be reconciled if those with less health expenditure risk are more likely to purchase Medigap, implying advantageous selection. By combining the MCBS and the Health and Retirement Study (HRS), we investigate the sources of this advantageous selection. These include income, education, longevity expectations and financial planing horizons, as well as cognitive ability. Once we condition on all these factors, seniors with higher expected medical expenditure are indeed more likely to purchase Medigap. Surprisingly, risk preferences do not appear to be a source of advantageous selection. But cognitive ability emerges as a particularly important factor, consistent with a view that many senior citizens have difficulty understanding Medicare and Medigap rules.