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Research ArticleArticle

Measuring the Effects of Welfare Time Limits

Marc K. Chan
Published online before print November 02, 2016, 0814-6554R2; DOI: https://doi.org/10.3368/jhr.53.1.0814-6554R2
Marc K. Chan
Marc Chan is a senior lecturer in economics at University of Technology Sydney.
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Abstract

This paper develops a simple regression model that incorporates the behavioral dynamics of time limits and is estimable by panel data techniques. By relating this model to reduced-form analysis, I clarify an implicit assumption that underlies a popular difference-in-differences (DID) specification, which understates the overall effects of time limits. I also find that a considerable amount of dynamics is due to individuals reducing welfare use, as their stock of remaining welfare eligibility depletes. This generates more plausible predictions related to counterfactuals, cumulative welfare use patterns, and mechanical termination of benefits.

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Journal of Human Resources: 60 (3)
Journal of Human Resources
Vol. 60, Issue 3
1 May 2025
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Measuring the Effects of Welfare Time Limits
Marc K. Chan
Journal of Human Resources Nov 2016, 0814-6554R2; DOI: 10.3368/jhr.53.1.0814-6554R2

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Measuring the Effects of Welfare Time Limits
Marc K. Chan
Journal of Human Resources Nov 2016, 0814-6554R2; DOI: 10.3368/jhr.53.1.0814-6554R2
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