Labor supply theory predicts systematic heterogeneity in the impact of recent welfare
reforms on earnings, transfers, and income. Yet most welfare reform research focuses
on mean impacts. We investigate the importance of heterogeneity using randomassignment
data from Connecticuts Jobs First waiver, which features key elements of
post-1996 welfare programs. Estimated quantile treatment effects exhibit the substantial
heterogeneity predicted by labor supply theory. Thus mean impacts miss a great deal.
Looking separately at samples of dropouts and other women does not improve the
performance of mean impacts. We conclude that welfare reforms effects are likely both
more varied and more extensive than has been recognized. (JEL D31, I38, J31)
Bitler, Marianne P., Jonah B. Gelbach and Hilary W. Hoynes.
2006."What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments."American Economic Review,
96(4): 988-1012.DOI: 10.1257/aer.96.4.988