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  5. What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments

What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments

  • Marianne P. Bitler
  • Jonah B. Gelbach
  • Hilary W. Hoynes
American Economic Review
vol. 96, no. 4, September 2006
(pp. 988-1012)
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Abstract

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 Connecticut’s 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 reform’s effects are likely both more varied and more extensive than has been recognized. (JEL D31, I38, J31)

Citation

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

Additional Materials

JEL Classification

  • D31 Personal Income, Wealth, and Their Distributions
  • I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
  • J31 Wage Level and Structure; Wage Differentials