PT  - JOURNAL ARTICLE
AU  - Ziliak, James P.
TI  - Making Work Pay
AID  - 10.3368/jhr.XLII.3.619
DP  - 2007 Jul 01
TA  - Journal of Human Resources
PG  - 619--642
VI  - XLII
IP  - 3
4099  - http://jhr.uwpress.org/content/XLII/3/619.short
4100  - http://jhr.uwpress.org/content/XLII/3/619.full
SO  - J Hum Resour2007 Jul 01; XLII
AB  - In the 1990s, many states liberalized statutory rules regarding the tax treatment of earned and unearned income for welfare program eligibility and benefit levels. I use quality control data from the AFDC/TANF program over 1983–2002 to document changes in the corresponding effective tax rates and benefit guarantees. After welfare reform I find that effective tax rates fell by 50 percent on earned income and by at least 70 percent on unearned income. States that aggressively reformed their welfare programs, especially those that implemented a stringent sanctions policy on benefits, experienced more rapid reductions in effective tax rates and guarantees.