Employer Demand for Welfare Recipients and the Business Cycle: Evidence from Recent Employer Surveys

Abstract

In this paper I present evidence on the extent to which labor market tightness, as measured by job vacancy rates and other indicators of hiring difficulty, affect the willingness of establishments to hire welfare recipients. From these estimates, I infer the effects of the business cycle on the labor market demand for welfare recipients. The data are from a new survey of employers in Michigan. The results indicate that labor market tightness has a substantial effect on employer demand for welfare recipients. They also suggest that employer willingness to provide workplace amenities or supports to welfare recipients (such as child care, transportation assistance, training, etc.), along with their receptiveness to policy interventions on behalf of recipients, is influenced by labor market tightness as well.